The Impact Of Investors' Attention On The P/E Ratio Of Listed Companies

The study of P/E ratio is derived from the model of stock pricing,which mainly includes several classic stock pricing models:Dividend Discount Model,Gordon model,Net Present Value of Growth Opportunity.Derived factor of the price earnings ratio from the formula.This analysis analyze the influence factors of P/E ratio from an objective view,and place company's performance on the decisive role about P/E ratio,and lack of the method of behavioral finance to investigate and study the subjective angle of investor behavior.China's current stock market is still at an imperfect market,and there are lots of individual investors.Due to the lack of financial knowledge of individual investors,the index of P/E ratio is much higher fame than other complex indicators,and the price earnings ratio has a great influence on China's stock market.Further analysis of the determinants of P/E is very necessary for China's securities market.In addition,according to the "limited attention theory",the attention of investors is limited,and limited attention is paid to in different stocks causing purchase of attention driven.Some media or securities companies will make use of the characteristics of the investor's lack of market information to guide the investors' attention,so as to achieve the purpose of promoting some stocks to rise.These are unfavorable for the healthy development of the market and the protection of small and medium-sized investors.This paper analyzes the mechanism of investors' attention to the stock price earnings ratio,and then puts forward some suggestions for improving the supervision level,which is certain significance to protect the small and medium investors and promote the healthy development of the stock market.Using the number of news items appearing on the Baidu search engine as the proxy variable of the company's media attention,this paper innovatively studies the relationship between the investor attention and the price earnings ratio from the human subjective perspective.The full text puts forward 3 original hypotheses,and put in the virtual variables,through controlvariable one by one.In order to solve the joint deviation between the media coverage and the price earnings ratio of the listed companies,the cross section data model based on the market change is constructed.The 3 original hypotheses are verified by the stability test and autocorrelation test.The following conclusions are obtained.1.Investors' decision to buy and sell stocks will be driven by attention,and in the case of other conditions,investors are more inclined to buy stocks with high attention allocation,that is,noticeable stocks.The more obvious the lack of market information is,the more obvious the phenomenon is,the "attention driven buying effect".2.the influence of the attention on the stock on the price earnings ratio has a positive correlation,that is,the higher the media attention is,the higher the price earnings ratio is,and the positive correlation is more significant after control the company scale.At the " attention premium ".3.the influence degree of the investor attention on the price earnings ratio is different because of the different market quotations.In the case of controlling the other explanatory variables,the media attention has a stronger explanatory power to the P/E ratio compared with the bear market,that is,the investor attention and the price earnings ratio have the "market effect".