Research On The Effectiveness Of Penalties For Information Disclosure Violations By Listed Companies In China

The new Securities Law,which came into effect on March 1,2020,significantly raises the cost of violations and strengthens the requirements for information disclosure,which directly reflects the government’s attention to information disclosure in the securities market and violations by listed companies.Strict information disclosure requirements are closely related to the importance of capital market information.High quality information disclosure can better ensure the effective operation of capital market.However,in recent years,there have been frequent violations of listed companies in China’s securities market,especially violations of information disclosure,which not only scares away many investors,but also poses a serious threat to the stability and healthy development of China’s securities market.Therefore,in order to protect the interests of investors,it is necessary to further study the relevant content of penalty effectiveness.In this context,this paper studies the efficient market theory,information asymmetry theory,investor protection theory,fraud triangle theory on the basis of.Firstly,the data of violation penalty of China’s A-share listed companies from2013-2022 are used to conduct some statistical analysis on the current situation of violation of information disclosure,penalty situation and penalty effect of China’s securities market.After analysis,the penalty measures of violation of information disclosure of China’s A-share listed companies have little effect.In the empirical research on the effectiveness of punishment,the fourth chapter of this paper is from four perspectives.Four explained variables were selected to examine the effectiveness of punishment: In the empirical part of this paper,cases of A-share listed companies in Shenzhen Stock Exchange punished for information disclosure violations during 2011-2021 are selected as the research object,and ordered multi-classification logistic regression method is adopted.(1)Changes in the quality of information disclosure of listed companies with information disclosure violations before and after being punished are analyzed.To study the effectiveness of punishment.(2)The change of corporate reputation score before and after punishment is used to study the educational effectiveness of punishment for violation.(3)The deterrence effect of violation penalty is studied by using the change of the number of violations of information disclosure of listed companies before and after punishment to study the effectiveness of punishment.(4)OLS regression model is used to investigate the betweenness of the disciplinary punishments by using the changes in the readability indicators of the annual reports before and after being punished.The empirical results show that the penalty for violation of information disclosure significantly improves the quality of information disclosure of companies with violation of information disclosure,indicating that the penalty for violation of information disclosure of listed companies is helpful to improve the quality of information disclosure of listed companies.Moreover,it plays a role of educating,deterrence,and exhorting to the non-compliant behaviors of listed companies,and also shows the effectiveness of penalties.The above conclusions are still valid after robustness.Furthermore,the effectiveness of punishment for information disclosure violations is more significant in small-scale enterprises and non-state-owned enterprises.Finally,this paper puts forward some suggestions to improve the effectiveness of punishment for information disclosure violations.Based on the above findings,this paper makes recommendations to improve the effectiveness of penalties from the perspectives of education,deterrent,and admonishment:(1)From the perspective of education,the regulatory authorities should further establish and improve the penalty system,give full play to the signal transmission role of the regulatory penalty,use the reputation mechanism to strengthen the implicit constraints on the company,and constantly improve the regulatory efficiency,so as to improve the effectiveness of the penalty for information disclosure violations.(2)From the perspective of deterrence,the regulatory authorities should identify the focus of supervision,strengthen the improvement of relevant laws and regulations,and take severe punishment measures against those responsible for information disclosure violations to increase the cost of their violations.Should continue to increase the punishment of the company directly responsible.For the listed companies repeatedly punished for repeated offenses,the implementation of the "progressive" punishment method,for those listed companies that have not been effectively punished,but also to strengthen the tracking and monitoring,in order to promote the Chinese capital market more healthy and orderly development.(3)From the perspective of encouragement,regulators are advised to regard the data in the annual reports of listed enterprises as an important basis for innovating regulatory approaches and improving the efficiency of regulatory penalties,strengthen the review of the big data in the annual reports of listed enterprises,fully tap the incremental information behind them,and scientifically guard against and resolve market risks.