A Study Of Investors' Market Reaction Based On The Replacement Of Company Gree's Chairman

The chairman of the company plays an important role in the development of the company.The excellent chairman brings huge profits to the company and promotes the continuous development of the company.On the contrary,the chairman's limited ability may put company into a dilemma.Therefore,investors would pay more attention to the change of the chairman of listed company.Although ordinary investors can not participate in the decision of the board of directors on the change of the chairman,they can use their funds and trading stocks to express their opinions to the change.The outlook for the company's development prospects later leads to investors'market reaction behavior.Due to the immature development of Chinese securities market and the poor stability of the securities market,investors'behavior is easily affected by their own psychological,cognitive and belief factors.Therefore,the theory of behavioral finance is used to study the change of the chairmanship of listed company's board of directors.The market reaction behavior of events has very important practical significance for information disclosure of listed companies in China,the supervision of the securities market and investor decision-making.This article takes the replacement of Chairman of Gree Group as the main research object.We will analyzes the market reaction behavior of investors to this event through the use of related theories of behavioral finance.First of all,this paper combs the behavioral finance theory of investor behavior decision-making.We will analyzes investor behavior from investor psychology,investor cognition bias,and investor behavior decision-making related theories.The market reaction mechanism of replacement events is analyzed.It is believed that investors' short-term market reaction behavior is easily affected by investor sentiment,conformity,profit-sharing,and avoidance of psychological characteristics.The long-term market reaction behavior of investors is more rational.Secondly,an investor sentiment index was constructed through principal component analysis(PCA)to quantify the investor's market reaction behavior,and the EGARCH and TGARCH models were used to characterize the stock price volatility after the change of the chairmanship of Gree Group.The study find that short-term investors Sentiment index changes greatly,mainly reflected in the dramatic fluctuations in trading volume and turnover.The sharp changes in the investor sentiment index lasted about a week.The results of the EGARCH and TGARCH models show that the negative effects caused by negative disturbances are greater than the positive interference effects.Therefore,it is believed that investors regard the replacement of the Gree Group chairman as an unfavorable signal to the market.Then,we use the theory of investor sentiment cycle,investors'psychology and disposition effects to investigate the short-term market reaction behaviors of investors.We believe that investors' behavior is mainly affected by investor sentiments and profits while avoiding disadvantages in the short term.The impact of psychological characteristics such as regret and disgust led investors to believe that the value loss caused by the same amount of future stock price loss was greater than the value increase caused by the increase.The investors behaved a strong reaction to the incident for the chairman of Gree Group in the short term.Finally,according to the characteristics of the market reaction behavior of investors to the turnover of the chairman of the board of directors,relevant policy recommendations are proposed from the perspectives of perfecting the corporate governance system,strengthening the information disclosure system,and investor behavior decision-making,so as to guide investors in rational decision-making.