Does Accounting Information Comparability Affect Stock Liquidity?

Accounting information comparability is one of the important characteristics of accounting information quality,promising the quality of accounting information with relevance and reliability.Comparability can help users understand the similarities and differences of accounting information to make effective analysis and prediction of the financial position,operating results and development prospects between different companies.With the rapid development of the economy and the trend of diversified information,the comparability has become an important information for users to make effective decision.With the revision and improvement of accounting standards,accounting information becoming more and more comparable,which is enough to see that our country attach importance to accounting information quality.Information users can not only compare accounting information of a company in different periods,but also compare different companies even different countries in the same period.Improving accounting information comparability can help enterprises optimize capital allocation and investment efficiency.Is there any real improvement in the capital market? This is the main question to be explored.Based on these,we use the earnings-return model proposed by De Franco et al.(2011)to study the impact of accounting information comparability on stock liquidity.The research path of this paper is: improving the accounting information comparability-improving the accounting information quality and quantity-reducing the Investor’s reverse selection-improving the stock liquidity.This paper focuses on stock liquidity as the economic consequences.It is mainly because the theory suggests that reducing information asymmetry will increase stock liquidity.From this perspective,the article contributes to the study of economic consequences of accounting information comparability and established the connection between accounting information and capital market.The causality is more clear and direct,and giving information providers and users some reference.The article selects Shanghai and Shenzhen Exchange listed companies except the financial and insurance industries from 2008 to 2017 to test the impact of accountinginformation comparability on stock liquidity.Further,researching whether the impact will become stronger or weaker if distinguishes companies in different natures.They are the internal information environment of the company itself,the perspective of institutional investors and the nature of equity.The conclusions are drawn through statistical analysis and model analysis: First,under the same conditions,the higher accounting information comparability,the higher stock liquidity.Second,the company’s internal control environment and quality will affect the correlation between comparability and liquidity.Under the same conditions,for companies with better internal control and higher internal control quality,accounting information comparability will have weaker effect on stock liquidity.Third,the proportion of institutional investors’ shareholding will affect the correlation between comparability and liquidity.Under the same conditions,for companies with higher proportion of institutional investors,accounting information comparability will have stronger effect on stock liquidity.Fourth,the nature of equity will also affect the correlation between comparability and liquidity.Under the same conditions,increasing comparability for non-state-owned companies will have stronger effect on stock liquidity.The article conclusions enrich the economic consequences of improving accounting information comparability,and have some references value for the company to improve the level of voluntary disclosure and information transparency.Finally,this paper propose suggestions from three aspects: companies,investors,and regulatory agencies.