Institutional Investors,Information Disclosure Quality And Cost Of Equity Financing

The capital market is a market where information is traded.High-quality information disclosure is beneficial to market participants such as listed companies,investors,regulators and intermediaries.An important economic consequence of information disclosure is the cost of equity financing.Foreign research shows that the improvement of information disclosure quality can reduce the cost of equity financing.Domestic scholars also found that the quality of information disclosure in China's capital market has a negative impact on the company's equity financing cost.In recent years,great changes have taken place in China--the Chinese economy has entered a new normal.Will the same conclusion be true abroad? The development momentum of institutional investors is getting stronger and stronger in China.It is necessary to study the role of institutional investors in listed companies in China.If institutional investors can play an effective role in listed companies,it is necessary to develop institutional investors to improve the overall level of listed companies in China.Because of the different types of institutional investors have their own investment characteristics and the pursuit of goals,may to the differences of the role of listed companies,classification to study the effect of various institutional investors on the company,can let regulators differentiation to guide the development of institutional investors,let real effective role of institutional investors to expand development.This article in combing the existing literature,and the use of the Efficient Market Theory,Asymmetric Information Theory and Principal-agent Theory on the basis of the theory analysis,and use the Shenzhen stock exchange in the A-share market data of 15 industries,A total of 2911 sample companies,using PEG model to calculate the cost of equity financing,set up multiple regression model,the empirical research on institutional investors and the quality of information disclosure and the equity financing cost of the relationship between the three.The innovation of this paper is that institutional investors are used as a moderating variable to test whether institutional investors can replace the influence of information disclosure quality on equity financing cost.Further,according to the presence or absence of institutional investors,the level of shareholding ratio,the different stability of shareholding and the existence of business connection with the invested company,the paper classifies the heterogeneous institutional investors into different regulatory roles.This paper expands the relevant literature,and through the study of the role of different types of institutional investors,it can be found in the listed companies to really play the role of governance.The findings are as follows: firstly,after controlling relevant variables,information disclosure quality has a negative effect on equity financing cost;Secondly,institutional investors' shareholding has an inhibitory effect on the negative relationship between the quality of information disclosure and the cost of equity financing.Thirdly,pressure-resistant institutional investors can weaken the negative relationship between information disclosure quality and equity financing cost,while pressure-sensitive institutional investors have no regulating effect on the latter two.Fourth,compared with transactional institutional investors,stable institutional investors do not significantly weaken the negative relationship between the quality of information disclosure and the cost of equity financing.Through the study of this paper,the author gives several Suggestions: first,strengthen supervision,improve the information disclosure system.For listed companies,low financing cost improves their financing efficiency and is conducive to better development.Therefore,companies should strengthen their internal management and enhance the quality of information disclosure at the source.Information disclosure violation is still common,market regulators should also strengthen the supervision of the company,establish a more perfect information disclosure system,to protect investors and the effective operation of the capital market.Next,build better investment environment,encourage orgnization investor to develop.At present,China's capital market is imperfect,the institutional investors in the market are not effective,so the relevant institutions should speed up infrastructure construction and improve the soft financial markets,the government should reduce the intervention of institutional investors,on the system provide the conditions for the institutional investors participating in corporate governance,etc.,so as to promote the development of institutional investors.Finally,differentiation guide and promote balanced development of institutional investors.Different types of institutional investors play different roles.Regulators should guide their development in a differentiated way,optimize the structure of institutional investors,and better enable institutional investors to play their market role.