Impact Of Executive Reductions On Stock Company Volatility

With the reform of the split share structure,the A-share market has ushered in a climax of understanding the ban,and the current behavior of executives' reduction of holdings has attracted more and more attention from investors.As the most special position in a listed company,executives hold most of the company's internal information,and its reduction in holdings will inevitably affect the company's stock price fluctuations.So how the executive's reduction in holdings will make the company's stock price fluctuate,and how the market responds to the executive's reduction in holdings will be an important content of this article.This article uses A-share executives to reduce their holdings as a research topic.Based on related theories such as effective markets and principal-agent,this paper conducts an empirical study on the market response caused by executives' holdings.First of all,review and summarize the domestic and foreign literature on holdings,and determine the research points and innovations of this article.Second,the related basic theories such as efficient market theory and principal-agent theory are explained,and the concept of executives' holdings is carried out.Define and briefly introduce the institutional background related to the reduction of shares,and make theoretical preparations for subsequent chapters.Through statistical and analysis of the current situation of China's A-share market executives' reduction of holdings,the research subject and direction are clarified,hypotheses are proposed,and after the determination of variables and the selection of samples,all A-share markets from 2016 to 2017 are analyzed by event research An empirical analysis of listed companies that have experienced a reduction in executive holdings and a study of different sub-markets have shown that the fluctuation of the company's stock price after the occurrence of a reduction in executive holdings will show an inverse V trend,which proves that The occurrence is timing and will have a negative effect on the market,that is,the stock price rose before the reduction,and the share price declined after the reduction.The response to the reduction is different in different sub-markets.Finally,some feasibility suggestions are put forward based on the research conclusions.