CFO And Stock Price Synchronicity

Stock price synchronicity is significantly related to firm-specific information,and it reflects information transparency of capital markets.Stock price synchronicity plays an important role in optimizing the resources allocation,improving the investment efficiency and reducing the risk of stock crash.At present,compared to developed countries,China's stock market is still with relatively lower information transparency and higher stock price synchronicity.Research on the stock price synchronicity may provide some empirical analysis to improve the efficiency of resources allocation in China.This paper investigates the direct impact of CFO gender on stock price synchronicity from a micro level.This paper gauge firm-specific return variation by regressing firm's stock returns on industry's and market's stock returns.By analyzing 5,345 observations of Chinese A-share listed companies from 2011 to 2017,it is found that companies with female CFOs have lower stock price synchronicity.The quality of accounting information(AIQ)is introduced as an intermediary variable to explore the transmission effect of AIQ between CFO gender and stock price synchronicity.This study adopts the discretionary accruals calculated by the modified Jones model as the measurement of AIQ.The results show that the accruals quality plays a partial mediating effect between CFO gender and stock price synchronicity,that is,female CFO can reduce the stock price synchronicity by improving the accruals quality.The results also indicate that there may be other mediating variables between CFO gender and stock price synchronicity.By studying the impact of CFO gender on stock price synchronicity,this paper enriches literatures on stock price synchronicity and executive heterogeneity.In addition,this study innovatively adopts the accruals quality as the intermediary variable between CFO gender and stock price synchronicity,which contributes to the research on how CFO gender affects stock price synchronicity.This study reveals the importance of female executives in improving the information transparency and resources allocation in the capital market,which provides strong empirical support for the qualification of female executives in corporate governance.Also,this study provides empirical evidence that executives gender diversity may improve corporate governance and reduce stock price synchronicity.