Exploration Of Connection Between Political Relevance And Stock Price Synchronicity

Stock price synchronicity is a phenomenon of "rising together or falling together"between the fluctuation of stock price and the change of market price.The high synchronization of stock price means that the unique characteristic of the stock has not been successfully released to the market,which makes the market unable to catch and feedback normally,which is an embodiment of the imperfect securities market.The basic function of the stock market is to make use of the signal mechanism of the stock price to realize the optimal allocation of resources.In a functional and effective securities market,the price can guide the scarce capital to achieve its maximum return.The purpose of this study is to explore the influence of political relevance on the stock price synchronization of listed private enterprises by the political relevance in private enterprises,so as to provide a certain basis for how to reduce the stock price synchronism and improve the market efficiency in the resource allocation of the economy,and also for the view of appointment in the reform of state-owned enterprises how to carry out the political connection direction.This article is divided into three parts.The introduction is a literature review on the relationship between political connection and stock price synchronism.The second part details the concept,definition and development of the political association and stock price synchronism.The third part is an empirical study of the relationship between the above two and a general summary of the article.This paper constructs a model of stock price synchronicity and political connection,and selects all listed A share private enterprises data from 2013 to 2015 for time panel study.In the establishment of the model,the stock share synchronization is calculated as the dependent variable.In the selection of the model control variables,this paper refer to the existing factors mentioned in the stock price synchronization literature,and select the company size,the asset liability ratio,the profitability,and the financial poles,the growth of the enterprise,the concentration of equity,the proportion of institutional investors and the exchange rate of stock,and the analysis of time variables and industry variables.Then,by classifying the central political connections and local political connections and stock price synchronicity,we get a completely different correlation result.Finally,regression analysis is carried out by Stata on data classification of different sectors in A share market.The innovation of this paper is that it is the first time to study the relationship of political relevance and share price synchronism between 2013 and 2015,and to divide the political association into the central and local areas,small board of main board and carve out board,and the classification of the different types of association,and enrich the existing research.