Investor Attention,Information Disclosure Quality And Financing Decision Selection

The cost of capital is of great significance to corporate investment and financing decisions,corporate management and corporate value.In China,the recognition of capital cost is gradually clear with the constant development of theory and practice.Domestic scholars believe that the cost of capital is the opportunity cost of investors choosing to invest in a company or project,or the required rate of return acceptable.Moreover,it has always been the focus of modern financial economics about the influencing factors of capital cost and how to reduce the cost of capital and thus affect investment and financing decisions.It has been studied that the interest of participation of large market investors will be higher when the degree of information asymmetry is weakened,which will increase liquidity and reduce investment risk expectations.In this context,the degree of information disclosure is negatively correlated with the cost of equity capital of enterprises.Additionally,investor attention is conducive to the efficient dissemination of information.High investor attention can not only improve the readability of information,but also provide a more efficient channel for information collection and processing,thereby promoting information dissemination and reducing agency costs and investor risk return rate,as well as reducing the cost of equity capital.In fact,the beginning of the information transmission process between the enterprises of the capital demand side and the investors of the capital supply side is due to the external information disclosure of the enterprise,however it is achieved by the attention and access of investors and the interpretation of acquired information.According to above information,investor attention and the quality of information disclosure have affected on the degree of information asymmetry between the supply and demand sides of the fund.Moreover,investor attention,as an external governance factor,contributes to information mining and information interpreting.Hence,on the issue of weakening the degree of information asymmetry and then reducing the cost of equity capital,the questions of what the relationship is between the two and what kind of mechanism is achieved will be the focus of this paper.This paper utilizes the data of A-share listed companies in Shenzhen Stock Exchange from 2011 to 2014 as the sample data,and based on literature review and dissection analysis,the following assumptions are proposed:(1)Investor attention is negatively related to the cost of equity capital;that is,the higher the investors attention,the lower the cost of equity capital;(2)The investor attention is positively related to the quality of information disclosure;that is,the higher the investor attention,the higher the quality of information disclosure;(3)The quality of information disclosure has part of mediating effect between investor attention and the cost of equity capital.In the basis of the theoretical research and empirical analysis of the relationship among investor attention,the quality of information disclosure and the cost of equity capital,the following conclusions can be drawn in this paper:(1)There are negative correlation between investor attention and cost of equity capital of the company.This is because high investor attention is likely to increase the ability to interpret information instantly,promote information processing and information dissemination,as well as reduce agency costs and investor risk return rate,thereby reducing the cost of equity capital for listed companies;(2)The higher the investor attention,the higher the quality of information disclosure;(3)The quality of information disclosure has part of mediating effect between investor attention and the cost of equity capital.Investor attention is able to improve the quality of information disclosure of listed companies so that reduce the degree of information asymmetry between investors and the company's internal managers and the credit risk of shareholders,thereby reducing the company's equity capital costs and promoting corporate choice of equity financing.The results of this paper enrich the existing literature,meanwhile the recommendations for the development of China's capital market are proposed in terms of channels and supervision in investor attention and information disclosure systems,ownership concentration and financing environment,etc.