Whether Investors’ Attention Can Improve The Directivity Of Supervision

Protecting investors is the fundamental mission of China’s Securities Regulatory Commission.The protection of investors is conducive to stabilizing financial markets and improving market efficiency.China has a highly decentralized market structure,so the problem of how to protect small and medium-sized investors in China is more prominent.At the same time,as a new financial market,the legal mechanism is not perfect,and it is difficult for small and medium-sized investors to use legal weapons to protect their rights and interests.That’s why regulators should actively listen to the demands of small and medium-sized investors,provide targeted protection for them and make up for the imperfect law system.Usually,the regulators of our country will pay attention to public opinion to help with regulatory work.In the aspect of public opinion,the existing research mainly focuses on the regulatory value of media attention.However,compared with media attention,investors’ attention can reflect investors’ demands more directly and comprehensively.Therefore,in theory,regulators should also make use of investors’ attention to improve the directivity and accuracy of supervision.In practice,whether investors’ attention can affect supervision and improve the directivity of supervision or not has not been studied by academia.This paper combs the relevant literature and institutional background.Based on the theory of principal-agent and the theory of regulatory cost in financial supervision theory,using Python and Stata tools,and taking the Exchange network interaction platforms and inquiry letters as the research objects,this paper makes an empirical study on the relationship between investors’ attention and regulators’ behavior.Exchange network interactive platforms are official websites started by Shenzhen Stock Exchange and Shanghai Stock Exchange,they enable investors and listed companies to communicate with each other directly.Investors’ attention can be effectively measured by the number of questions raised by investors on the platforms.Based on this,this paper studies the relationship between investors’ attention to listed companies and companies’ probability of receiving inquiries.At the same time,this paper further explores the influence of investor sentiment and the quality of companies’ replies in the platforms on the main effect.Empirical results confirm that the more attention companies receive from investors on the Exchange network interaction platforms,the greater the probability of receiving inquiries,and the results have significant economic effects.At the same time,negative investor sentiment and poor quality of response will aggravate this effect.The empirical results of this paper show that when the Exchange conducts supervision,it pays special attention to the companies that more investors focus on,especially the companies with negative investor sentiment and the companies with poor quality of return.The platform improves the directivity of supervision.The conclusion of this paper has great practical and theoretical significance.In reality,this paper confirms the regulatory value of the Exchange network interactive platforms: small and medium investors can use the platform to convey their own interests and express their concern for listed companies,so as to attract the attention of regulators to the company and protect their own interests;regulators can tap the public opinion of small and medium investors from the platform,enrich regulatory clues,and carry out targeted regulatory work,so as to strengthen the protection of small and medium-sized investors,and ensure the efficiency of the market.By investing more supervision attention to companies with higher investors’ attention,regulators can also urge listed companies to perfect corporate governance when more investors pay attention to them.At the theoretical level: previous studies have confirmed that media attention can improve the level of corporate governance by increasing the probability of administrative intervention,but no research has explored investors’ attention’s influence on corporate governance.This paper firstly links investors’ attention with supervision,confirms that investors’ attention will affect the directivity of supervision.Based on the conclusion of this paper,the future research can further study investors’ attention’s influence on corporate governance.