Institutional Investors, Accounting Information Quality,and Stock Price Synchronicity

The academic community believes that the capital market in an efficient state of operation can optimize the allocation of market resources through the information transmission function of the listed company's stock price,and promote the rapid development of the national economy(Rajian and Zingales 1998).The stock price can optimize the function of resource allocation.The premise is that the stock price in the market can reflect the correct information of the listed company in time.Driven by China's constantly improving system,China's current market efficiency has improved,and stock price synchronicity has declined.Morck,Yeung,and Yu(2000)analyzed the stock price fluctuation data of 40 sample countries and found that China's stock price fluctuations were as high as 80%.However,according to the results calculated in this paper and related literatures on the synchronization of stock prices in China in recent years,the average stock price synchronicity of China's A-share market has dropped to about 40%.Although the market efficiency has improved,the phenomenon that China's stock price fluctuates with the average market yield rate is still relatively serious compared with the capital market of developed countries.A large number of stocks show a trend of volatility consistent with the market,which means that it is difficult for investors to make effective decisions or to make erroneous decisions.Funds are difficult to meet market demand,and capital market efficiency is low.Roll(1988)believes that the degree to which the company's trait information is integrated into the stock price and the degree of influence of the noise caused by the irrational trading of market investors on the stock price is an important factor explaining the non-synchronization,that is,the inconsistency between individual stocks and the average return of the market.Explain that the information efficiency school that mainly explains the volatility of traits with trait information and the noise school that mainly explains the volatility fluctuations with noise influence are derived.High stock price synchronization has a certain relationship with China's current capital market structure.In China,investors are still mainly small and medium-sized retail investors.Although institutional investors have achieved a certain degree of development in recent years,they are compared with mature capital markets.The proportion of institutional investors in China is still small,and the professional level still needs to be improved.Institutional investors are often seen as typical information tradersand professional traders who tend to have a better understanding of the information disclosed by the company and have a stronger ability to exploit private information so that they are in the capital market.The functions shown above are both traders and information transmitters.Based on the stock price formation mechanism and China's realistic background,this paper discusses the relationship between the shareholding ratio of heterogeneous institutional investors and stock price synchronicity.One of the main ways for listed companies to transmit information to investors is to publicize some announcements that reflect the operation of listed companies,which may affect investors' decision-making,in accordance with regulatory requirements.Among them,the regular financial reports of listed companies have been the focus of the regulators and investors,and accounting information is highly valued by the market as the most accurate type of information in the regular financial report that reflects the company's operating results and is most easily understood.The fluctuation of the company's stock price.According to the existing research on the quality of accounting information and the synchronization of stock prices,the two are likely to show different relationships in different market environments and the participation of different investors.Some scholars pointed out that the specific performance between the two Relationships are likely to be affected by the information environment.This paper will discuss the impact of accounting information quality on stock price synchronicity under the current information environment in China,and will discuss the quality of accounting information by the proportion of institutional investors' shareholdings by adding institutional investors' shareholding ratio and accounting information quality.The role of regulation in relation to stock price synchronism.This paper selects the empirical data of China's non-financial listed companies from2013 to 2017.The empirical results show that the higher the shareholding ratio of institutional investors,the lower the stock price synchronicity R2,and the negative impact of stable institutional investors on stock price synchronicity.The impact is more significant.At the same time,this paper also finds that in the case of large noise in China's market,the quality of accounting information is inversely proportional to the stock price synchronization.Finally,the research proves that the stable shareholding ratio of institutional investors improves the quality of accounting information.The positive correlation between stock price synchronicity has a significant inhibitory effect.The regression results show that in China's current capital market,R2 is not an effective indicator to measure market information efficiency.R2 cannot be viewed from a single perspective.It is necessary to combine existing information environment and stockprice formation mechanism to consider relevant factors from the perspective of information and noise.The impact on stock price synchronicity.The possible innovation of this paper is to rethink the impact of institutional investors and accounting information quality on stock price synchronicity from the perspective of stock price formation mechanism,and classify institutional investors according to the stability from time and industry dimensions.The difference in the mechanism of action of type institutional investors.