An Empirical Study On The Impact Of Annual Report Inquiry Letters On Firm Inefficient Investment

With the gradual improvement of social and economic development,the capital market has become an important part of guiding the allocation of resources and improving the market system,so the stability of the capital market is conducive to promoting stable economic development.In order to achieve the purpose of efficient operation of the capital market,and as the "approval system" gradually transitions to the "registration system",the focus of regulators has gradually shifted from pre-examination to post-event supervision,so the quality of information disclosed by enterprises is particularly important.Therefore,the CSRC and other regulatory authorities have put forward a "information disclosure-centered" regulatory policy,and at the same time encouraged various regulatory authorities to innovate regulatory methods according to their characteristics and improve regulatory efficiency。Among them,the inquiry letter system with the exchange as the regulatory entity is committed to improving the information disclosure system,mining the information disclosed by enterprises,improving the authenticity and adequacy of enterprise information disclosures to a certain extent,and improving the quality of information disclosure.And after the test of the market,it has gradually developed into an important mechanism for non-punitive supervision to improve the completeness,transparency and accuracy of information disclosure.Based on the background of the increase in the frequency of inquiry letters from stock exchanges and the focus on inefficient investment behavior of enterprises,this paper first sorts out the existing research content,and explains the conceptual definition and theoretical basis of inquiry letters and corporate inefficient investment.Secondly,through the analysis of the content of annual report inquiry letter and corporate inefficient investment,it is proposed that the annual report inquiry letter can identify and suppress the inefficient investment of enterprises,and then the impact path is proposed.Finally,the data of the annual reports of A-share listed companies and their annual report inquiry letters from 2015 to 2021 are used to empirically explore the impact and effect of exchange annual report inquiry on enterprises’ inefficient investment.The conclusions are as follows: first,the annual report inquiry letter can have a restraining effect on the inefficient investment of enterprises;Second,the different text characteristics of the annual report inquiry letter have different effects on the non-efficiency investment of enterprises;Third,there is a certain substitution effect between the annual report inquiry letter and the media attention,and when the corporate media attention is high,the inhibiting effect of the annual report inquiry letter on the inefficient investment of the enterprise is weakened;Forth,financing constraints plays an intermediary role in the impact of annual report inquiry letters on enterprises’ inefficient investment;Fifth,the power of management can affect the role of the annual report inquiry letter on the non-efficiency investment to a certain extent.At the same time,in further research,the impact of different nature of enterprise property rights on the effectiveness of annual report inquiry letters is discussed,and whether there is a spillover effect of annual report inquiry letters on the degree of inefficient investment of enterprises.Finally,according to the research results,relevant suggestions are put forward from both the regulatory authorities and enterprises,and the regulatory authorities should first further improve the supervision system of inquiry letters,improve the information disclosure procedures of the whole process,and make it more convenient and efficient for multiple parties to receive relevant information.Secondly,strengthen the management of inquiry letter content,make full use of this open and transparent interaction process between regulators and enterprises,the content of the inquiry should be concise and clear,hierarchical and focused,so that market participants clearly understand the focus of regulators;Finally,strengthen the supervision of inquiries,improve the supervision system,incorporate social professional forces such as auditors,analysts and the media into the institutional system,improve the efficiency of information dissemination,expand the scope of reception,and actively combine administrative forces such as the CSRC to improve the deterrent effect of the inquiry letter system.Enterprises should first pay attention to the inquiry letter,improve the level of governance,reduce the probability of receiving the inquiry letter and its negative impact as much as possible,and secondly,take the initiative to improve the quality of information disclosure,improve the market information environment,and improve operational efficiency.