The Impact Of The Complexity Of Listed Companies' Annual Reports On The Synchronization Of Stock Prices

Stock price synchronicity refers to the phenomenon that listed companies’ stocks show the same rise and fall in the transaction and is an important indicator to measure the effectiveness of the capital market.The existing literature points out that compared with the stock market in western developed countries,China’s stock market is still in the development stage,and stock price synchronization is at a relatively high level in the stock market of all countries in the world.To a certain extent,this indicates that China’s securities market is not efficient in pricing,resource allocation efficiency is low,and protection for small and medium investors is insufficient.In addition,although the CSRC has issued a series of measures to regulate the information disclosure system of listed companies,listed companies still frequently appear in whitewashing statements and insider trading,which disrupts the market order.What is more serious is that the authenticity and accuracy of information disclosure of some companies are difficult to be guaranteed,which makes investors gradually lose confidence in the information disclosure of listed companies.On the other hand,with the constant regulation and improvement of China’s securities market,analysts,as information brokers in the capital market,pass on their own professional information collection and analysis capabilities to pass effective information of listed companies to investors,in listed companies and Investors have played a certain role as a bridge.Therefore,this paper has important theoretical and practical significance by studying the impact of listed company’s annual report complexity on stock price synchronicity and considering the impact of analyst tracking on stock price synchronicity.This paper summarizes the relevant literatures on the complexity of annual reports,stock price synchronicity and analyst tracking of listed companies at home and abroad,analyzes the research contents,research methods and conclusions of existing literatures,and points out the shortcomings of existing literatures.This paper introduces the concept of stock price synchronicity from the perspective of capital asset pricing model theory with reference to the existing literature,and demonstrates its rationality as a market effectiveness indicator.Based on the traditional theory of effective market hypothesis and information asymmetry,this paper demonstrates the impact mechanism of listed company’s annual report complexity on stock price synchronicity,and analyzes the role played by analyst tracking.On this basis,this paper proposes the corresponding research hypothesis and constructs an empirical model.This paper selects the data of 2106 listed companies in the three boards of Shenzhen Stock Exchange,SME board and GEM,and uses the method of empirical analysis to analyze the impact of listed company’s annual report complexity on stock price synchronicity.Further,in order to explore the impact of this impact on different sectors of Shenzhen A-share,this paper also conducted an empirical analysis of the classified samples.In order to ensure the robustness of the conclusion,this paper uses the different indicators of the complexity of the annual report to conduct repeated tests.The results of this study show that:(1)The complexity of annual reports of listed companies is positively correlated with the synchronization of stock prices,that is,the higher the complexity of annual reports of listed companies,the higher the synchronization of stock prices.(2)Analyst tracking is positively correlated with stock price synchronization,that is,the higher analyst’s attention to listed companies,the higher the stock price synchronization.(3)Whether to employ the Big Four as auditors or not has no significant synchronization with stock price,but in the listed companies employing the Big Four as auditors,the readability of annual reports has a significant negative correlation with stock price synchronization.(4)In terms of property rights,there is a significant positive correlation between state-owned listed companies and stock price synchronization,that is,the stock price synchronization of state-owned listed companies is higher than that of nonstate-owned listed companies.Based on the above research conclusions,this paper proposes the following policy recommendations:(1)Further improve the information disclosure system of listed companies,establish and improve the information disclosure system and incentive and restraint mechanism,strengthen the supervision of listing information disclosure,and improve the stock market by improving the information transparency of listed companies.Information environment to improve the efficiency of the stock market.(2)Standardize and improve the development of the analyst industry,effectively exert the external supervision role of analysts,promote the healthy development of the analyst industry,and enable analysts to play a better role as a bridge between listed companies and investors.(3)Strengthen the investor’s rational investment concept and improve the protection system for investors.