Stock Exchange Inquiry Letters On Annual Report And Investment Efficiency Of Listed Company

Annual report inquiry is a way for the exchange to conduct post-supervision on the financial reports of listed companies and gradually becomes an important mechanism for the exchange to supervise the information disclosure of listed companies.In recent years,the two exchanges have increased the frequency of issuing inquiries during the annual report season.According to information asymmetry theory,principal-agent theory and signal transmission theory,when an exchange sends an annual report inquiry letter to a listed company,it can transmit signals to the market.Market investors,media and other stakeholders,receives the signal to be questioning the company bring more external supervision and restraint,to the listed company through the reply more high quality of information disclosure,reduce the information asymmetry of market trading,relieve the contradictions of the listed company’s internal principal-agent,reduce opportunistic behavior management investment,improve the investment efficiency of listed companies.Through manual collection,this paper sorts out the situation of China’s A-share listed companies receiving annual report inquiry letters from the exchange from 2015 to 2019,and takes this as the research object to analyze the impact of exchange annual report inquiry on the investment efficiency of listed companies.The results show that the exchange annual report can significantly improve the investment efficiency of listed companies,and the impact of exchange annual report on the investment efficiency of listed companies is more significant when the listed companies are in a region with a higher degree of marketization or when the management of the listed companies is less powerful.Further supplemental tests show that the higher the severity of the annual inquiry letter,the higher the investment efficiency of listed companies.Specifically,the impact on the investment efficiency is more effective when the number of questions received by the respondents in the annual report inquiry letter is higher,the accounting firm is required to give professional advice,the "investment" related matters are included,and the response is delayed.At the same time,the exchange inquiry regulation has spillover effect,which can enhance the investment efficiency of comparable companies in the same industry or in the same province.Finally,by replacing the explained variables,matching the propensity scores of the samples,and constructing the differential model,the robustness test is carried out,and it is found that the research conclusion is still valid.This study has two aspects of significance:from the perspective of theory,this paper has supplemented the research on the economic consequences of exchange inquiry,and provided new empirical evidence for the effectiveness of regulatory inquiry from the perspective of investment efficiency.And this article research from the Angle of supervision has enriched the influence factors of the listed company investment efficiency research,confirm the efficiency of investment will be affected by the exchange annual report inquiry.From a practical point of view,this study is helpful to strengthen the dominant position of front-line exchange supervision,improve the quality of information disclosure of listed companies,and promote the rational allocation of resources of companies.