Related Party Transactions,Analyst Behavior And Stock Price Synchronicity

Because of its unique economic characteristics,the related party transactions has an important influence on the operation of the company,which is widely regarded by the academic circles.However,scholar’s discussion about related party transactions is maily focused on the company level,actually more importantly for investors is the performance of the company’s share price in the capital markets.Stock price synchronicity is a common economic phenomenon.in the development of capital markets around the world,and is more common in emerging markets.The most immediate factor affecting stock price synchronicity is the disclosure of the company’s information,and the related party transactions has a significant impact on the disclosure of corporate information because of its particular trading background.And analyst’s behavior can greatly improve the quality of information disclosure in capital market due to their professional skils.Therefore,we wonder whether the related party transactions will affect stock price synchronicity?If so,what is the mechanism?And as an information intermediary,whether the secuities analyst might affect the relationship?The answers to these questions are great importance to improve the information efficiency of China’s capital markets.This paper discusses the effect of related party transactions on the efficiency of capital market in the perspective of informations efficiency from the capital market firstly.This article selects the Chinese A-share listed companies from 2006 to 2016 data as sample,discusses how the related party transactions affect stock price synchronicity,and based on the viewpoint of information transparency,investigate the mechanism.It also looked at the impact of analyst behavior on the relationship.The empirical results show that:(1)The related party transactions significantly reduces the stock price synchronicity of the listed company,and the related party transaction has an important effect on the information content of the company’s share price.(2)The transparency of information is the intermediary variable that affects the related party transaction and stock price synchronicity.Related party transactions because of its trust and potential trade motivations behind,will reduce the company specific information disclosure,reduce the company’s information transparency,and increase the noise impact on stock price;China as an emerging capital market,the information market has many problems,the noise content is higher,share price mainly driven by noise.In this case,stock price synchronicity is positively correlated with information transparency.(3)Analyst behavior can reduce the noise of the shares in the market,as the stock price is affected by the noise level is reduced,related party transactions will be less impact on stock price synchronicity.Further analysis found that the different transaction of related transactions to varying degrees impact on stock price synchronicity,in five main associated business matters,only commodities trading class can significantly reduce the stock price synchronicity.In addition,the mechanism of corporate governance of listed companies(ownership concentration and four big auditors)will be an impact on the relationship between the related party transactions and stock price synchronicity.