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Information asymmetry analysis of listed companies in China

Author: ZhangGongFu From: www.yourpaper.net Posted: 2010-04-05 20:02:06 Read:
[Abstract] PricewaterhouseCoopers released a report on the "Opacity Index" report, China's opaque index ranks 35 countries in the first assessment of the report, is the most opaque countries. The conclusion of this study has aroused the attention of the Chinese capital market information asymmetry. Chinese listed company information asymmetry so bad? Empirical literature on asymmetric for the study of Chinese listed companies based on the academics from the two aspects of the mandatory information disclosure quality and the quantity of voluntary information disclosure of listed companies in China Information asymmetry visit and found that, indeed quite serious information asymmetry of the listed companies in China, mainly for the poor quality of the mandatory information disclosure, the extremely low level of voluntary information disclosure.
[Keywords] information asymmetry; earnings management; voluntary disclosure

Introduction

The capital market is not only a variety of information distribution center, and all the time in the production and manufacturing of new information, socio-economic information source. However, the capital market is also the most asymmetric market information. Mainly capital market information asymmetry in the distribution of information between the parties to the participants of the capital market in the center of the listed companies is uneven, unequal. This information asymmetry not only directly affect the decision-making behavior of the capital market participants and the interests of the difference, can also cause the unfair market transactions, reduce the operating efficiency of the capital market, causing the market to shrink even market failure (Ma Guangqi, 2006). Therefore, the listed company information asymmetry is highly relevant parties concerned.
How information asymmetry? January 2001, PricewaterhouseCoopers (price Waterhouse & Coopers) released a report on the investigation report of the opaque index "(The Opacity Index). The report surveyed 35 countries and regions, "Opacity Index" topped the list of the most opaque countries for information. Coincidentally, Gul and Qiu (2002) of 22 emerging countries, including China, India, Korea, Mexico, the degree of information asymmetry assessment, in descending order, China ranked 9.
The conclusions of these studies to cause domestic theorists and practitioners in an uproar, many of whom are the Chinese Ming Buping scholars, they think foreign institutions, scholars do not understand China's national conditions, its conclusions do not conform to the facts. Chinese scholars understand the country and how to evaluate the information asymmetry of the listed companies? This paper Reorganizing Chinese listed companies' information asymmetry for the study of literature, to assess the information asymmetry of the listed companies, for regulatory and investors to more fully grasp and understanding of listed companies information asymmetry provides empirical material, to provide the basis for the relevant departments to strengthen supervision of information disclosure.

Chinese listed companies' information asymmetry performance

Asymmetric information is the norm of the real world, it refers to market transactions, the parties have not, party occupy more information than the other, and in the information dominance, while the other is in the information disadvantage . The disclosure of information that can effectively mitigate asymmetric information, and therefore the level of information disclosure is one of the indicators used to measure the information asymmetry of scholars (Gul and Qiu, 2002). Based on whether or not to be regulated, the information disclosure of listed companies can be divided into mandatory disclosure and voluntary disclosure. Between operators and investors of listed companies information asymmetry depends mainly on the number of mandatory disclosure of information quality and voluntary disclosure of information, and therefore the existing literature mainly from the the study listed companies of these two aspects of information asymmetry.
(A) mandatory information disclosure of listed companies is low quality
Mandatory disclosure of information quality is mainly reflected in the authenticity of the information disclosed, timeliness, adequacy, value relevance and comparability features, which authenticity is the most important characteristic of the quality of information disclosure, the maintenance of the principle of fairness of the capital market basic requirements, this paper mainly on Chinese listed companies mandatory disclosure of information about the authenticity of the situation. According to China's relevant departments to investigate and deal with violations of the listed companies announcement as well as the relevant empirical results, false disclosure and earnings management are two important factors that affect the quality of information disclosure of listed companies in China.
Distribution of illegal disclosure of 1994-2006 was investigated and dealt with 419 times the China Securities Regulatory Commission, Ministry of Finance, Shanghai and Shenzhen Stock Exchange listed company analysis, have been punished for listed companies' information disclosure of false or seriously misleading statement "on average accounted for 22.54% of all the number of violations is being investigated. (2) can be seen listed company in more serious cases of false disclosure.
Therefore, compared with the mature Western capital markets, listed companies in China are widely there is a more serious phenomenon of earnings management has a special significance, as profits of listed companies in China in the issue of new shares, rights issue, warranty card and avoid special treatment.
(1) initial public offering (IPO) in earnings management. Due to the requirements of the company's initial public offering of shares in China must have a record profit in nearly three years, also appeared around the historical accounting earnings management packaging. Shu Lin and Wei Ming Hai (2000), studies have shown that industrial company before the IPO earnings management. , Wang Yixia and Xia Xinping (2004) study shows that of the 146 listed companies, the prospectus related to the historical accounting information exists excessive packaging components. Underperformance and yellow New (2003), 1998-2000 301 IPO companies as samples found that these companies are really engaged in the issue of the year, the year before and one year after the earnings management, and issued other found no surplus for the year to management evidence.
(2) the refinancing of earnings management. Since 1993, the China Securities Regulatory Commission has six released on the refinancing of listed companies (allotment or issuance of new shares), each of the specified conditions of allotment or issuance of new shares are involved in the profitability of listed companies, the main content The proposed allotment company three-year average return on net assets required to achieve more than 10% to 6% thereafter; 2001 years ago, the policy requires the issuance of policies by 6% in 2001 to 10% in 2002. Ping Xinqiao natural Li (2003) theoretical model prove eligible for the refinancing of listed companies Securities Regulatory Commission is one of the reasons leading to earnings management of listed companies, a lot of empirical evidence to support this conclusion, such as Sun Zheng Inspection and Wangyue Tang (1999), Chen Xiaoyue (2000) and Jiang Yihong (2003), the distribution of the return on net assets of the listed company, were found in the right side of the allotment lifeline (ROE 10%), a listed company has The trend is very concentrated, so that the listed companies reached allotment requirements, there is a certain profit Falsified; SFC change the allotment policies (ROE fell to 6%), Jiang Yihong (2003) found that the return on net assets rate in the area [6%, 7% within the number of listed companies are highly concentrated, and Yu (2006) found that the distribution of the return on net assets of the listed companies in 1999-2000 there is a clear 6% and 10% of the phenomenon, 2001-2002, only 6% phenomenon, 10% of the phenomenon has completely disappeared. Yang Xudong and Mo Xiaopeng (2006) claimed that the future of China's stock market may be 18% of the phenomenon, because they are located from 1999 to 2003 [18%, 21%] range of the number of listed companies has grown rapidly.
(3) To avoid losses, special treatment or delisting of earnings management. According to the relevant provisions of China's listed companies, two consecutive years of losses, will be the stock exchange special treatment, three consecutive years of losses, will be suspended from listing, if you still can not return to profitability, it will terminate the listing. Therefore, to avoid losses, special treatment or delisting also listed companies one of the motivations for earnings management. Land bridge construction (1999) found losses of listed companies in China to avoid three consecutive losses to widespread losses take to lower profits for the year before and after the year to take losses in the Shanghai A-share listed companies as of the end of 1997, the company accrued profit The increase in profit earnings management behavior. Yaping (2005), the use of parameter estimation method to infer the frequency and amplitude of the threshold at earnings management, found that earnings management of listed companies in China from 1995-2003 to avoid reporting losses, an average of 64.4% loss companies on the threshold 0:00 earnings management and achieve the purpose to avoid reporting losses, the average level of earnings management to improve ROA data 0.065. Wu Liansheng, et al (2007) further compared the extent of earnings management between 1998 and 2004 listed companies and non-listed companies, results showed that the frequency of earnings management of listed companies is about 3 times the non-listed companies, while the average level of earnings management about a non- 13 times the listed companies. The evidence showed that, to avoid losses, special treatment or delisting is one of the most basic motivation of corporate earnings management.
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