| On August 24,2020,the first batch of 18 enterprises in the GEM pilot registration-based IPO system were successfully listed,accelerating the pace of the comprehensive implementation of the registration-based IPO system.The fundamental difference between the registration-based IPO system and the approval-based system is that the registration-based IPO system attaches more importance to information disclosure,and its information disclosure requirements are more strict,comprehensive,in-depth and accurate,and urges listed companies to pay attention to the judgment of investors,and the information disclosure is more true,accurate and complete.In order to implement the registration-based IPO system smoothly,the regulatory authorities have taken precautions for the formulation of the information disclosure mechanism,and in 2014,they carried out the "information disclosure fast lane" reform,switching the prior review of the annual report to post-audit.As a key link of the post-audit of the annual report,the exchange inquiry letter mechanism under the innovation of the regulatory system has become an important institutional basis of strengthening the corporate information disclosure obligation and effectively protecting the efficiency of investors’ decision-making,which has become an important institutional basis for the implementation of the registration-based IPO system mechanism.In recent years,Chinese enterprises rely too much on indirect financing which mainly is bank loan increasingly prominent,and the cost of capital to the enterprise operation,investment,distribution activities will have a decisive influence,under the background of the current pandemic,how to reduce enterprise financing costs,help its comprehensive establish new advantage development is more widespread attention from all walks of life.Since 2014,the exchange inquiry letter both in the number or inquiry questions increased year by year,effectively improve the capital market information efficiency,corporate governance,information disclosure,audit quality,surplus management,social responsibility.A series of company financial behavior has become the focus of researchers in recent years.Although some scholars have found the relationship between the inquiry letter and the cost of corporate debt capital,the current academic circle still needs to have a more comprehensive and in-depth analysis of how the inquiry letter affects various corporate capital costs,including the cost of debt capital cost and equity capital cost.The inquiry letter is mainly divided into two categories: reorganization inquiry letter and financial report inquiry letter,among which the largest financial report inquiry letter includes annual inquiry letter,semi-annual inquiry letter,quarterly inquiry report,etc.In different kinds of financial report inquiry letter,the annual report inquiry letter is undoubtedly the most important inquiry letter.Among all the inquiry letters,the annual report inquiry letter has the largest number of articles,the annual report involves the most extensive problems,and the highest information content of the inquiry letter and the reply letter,which provides an effective entry point to study the effect of the inquiry letter.The registration-based IPO system takes information disclosure as the core,and the reform direction oriented by investor decision-oriented needs is to provide better protection for investors.Therefore,in the process of research inquiry letter,investor protection is a research perspective that cannot be ignored.This paper creatively takes the inquiry letter of the annual report as the investor protection means of securities supervision dimension and incorporates it into the investor protection research.It will help to provide policy suggestions for China’s capital market to further improve the "non-punitive regulatory" related system represented by the exchange inquiry letter.For listed companies,the annual report inquiry letter with its professionalism,flexibility,undoubtedly improve the quality of the company information disclosure,reduce the information asymmetry between the listed company and investors including creditors and shareholders,accelerate information transmission,and reveal the risk.Investors can adjust the necessary remuneration to maintain their own rights and interests.However,the above functions of the inquiry letter may also be different under the investor protection mechanism of different corporate governance dimensions and regional rule of law dimensions.Based on the above analysis,based on the perspective of investor protection,this paper research the relationship between the annual report inquiry letter and fiance cost include enterprise debt capital cost and equity capital cost,analyzed its influence path from the information production,information transmission,information interpretation channels.And further study the influence of other dimensions of investor protection mechanism on the above relationship.This study is designed to enrich the relevant literature of regulatory policies of China’s capital market based on the institutional background of China,contribute unique evidence to the regulatory literature of the international academic community on the nature of regulatory opinion letters.The research in this article can help regulators to develop practical information disclosure policies,guide investors to pay attention to regulatory information,and thus promote the healthy development of the capital market.This paper studies the following four questions with the annual report inquiry letterinvestor protection-capital cost as the main line:(1)The muti-dimensional investor protection meaning and its measures.Analyze the capital cost impact mechanism of the annual report inquiry letter from the perspective of investor protection,and put forward the impact framework.Through study the annual report inquiry letter under different dimensions of investor protection,and its relationship with other dimensions of investor protection.Try to treat the annual report letter as securities supervision dimension investor protection to reveal its investor protection mechanism.Enrich the connotation of the investor protection mechanism.(2)The impact of the annual report inquiry letter on the capital cost of debt and its mechanism.After analyzing the impact of the annual report inquiry letter on the cost of debt capital,the inquiry letter is studied how to affect the capital cost of debt through information production represent by audit quality,information transmission represent by media attention,and the interpretation of the debt default risk measurement information from the above three dimensions.The study found that the letter of inquiry on the annual report increased the debt capital cost;and the above impact was more significant among the audit companies of non-four major accounting firms,no media concern,and higher risk of debt default.It shows that the annual report of the inquiry letter improves the three channels of information production quality,information transmission speed and information interpretation efficiency to make creditors better understand the company,increase the necessary remuneration rate required,so as to improve the debt financing cost of the company.(3)Impact of the annual report inquiry letter and the equity capital cost and its mechanism.After analyzing the impact of the annual report inquiry letter on the cost of equity capital,it still measures the cost of equity capital,and studies how the inquiry letter affects the cost of equity capital from the above three dimensions.The study found that the letter of inquiry in the annual report increased the cost of debt capital;and the above impact was more significant among non-four major accounting firms,no media concern companies and higher risk of stock price crash.It shows that the annual report inquiry letter improves the company’s information production quality,the speed of information transmission and the efficiency of information interpretation,and increases the required information compensation rate,so as to improve the equity financing cost of the company.(4)The impact of the change of the investor protection level in the corporate governance dimension on the relationship between the inquiry letter and the capital cost,and the impact of the investor protection level in the regional legal system dimension on this regulatory effect.Research found that the annual report inquiry letter’s impact to the cost of debt capital and equity capital costs are mainly exist in the listed companies of which the corporate governance dimension investor protection level declined,and further found,the weaker the regional legal dimension investor protection,the more obvious the impact show.It shows that,as the investor protection mechanism at the securities supervision level,the exchange inquiry letter can form an obvious complementary relationship with the investor protection mechanism of corporate governance and regional rule of law to protect the rights and interests of investors.The above research conclusion shows that the annual report letter can improve the company the quantity or quality of information production,accelerate the company information in the capital market,make investors more efficient interpretation of company information channels,let creditors or shareholders more understand the company,and improve the necessary remuneration to protect their own interests,ultimately improve the company’s debt capital cost and capital cost and equity capital cost.And the above role mainly exists in the companies with a lower level of investor protection in other dimensions.In summary,this article makes the following policy recommendations:(1)For the regulatory authorities,The information disclosure methods of listed companies should be further improved.They should pay more attention to the risk revealing function of the inquiry letter,increase the inquiry intensity to the company,provide more information channels for investors,effectively protect the rights and interests of all kinds of investors;At the same time,stipulate the reply date of the company,And to warn or take further measures to the company that does not return the letter on time,So as to maximize the role of the annual report inquiry letter in the company’s information production,information dissemination and information transmission,We will strengthen the market supervision mechanism,Accelerate the market survival of the fittest of listed companies through the cost of capital,So as to improve the efficiency of resource allocation.(2)For capital market investors,creditors should not only rely on legal protection and debt provisions,but also pay attention to the annual report inquiry letter,timely obtain corresponding company information and reduce their credit risk risks;external shareholders of the company should fully understand the inquiry letter,optimize investor decision-making efficiency,accurately grasp the fundamental information,and avoid unnecessary losses caused by irrational investment behavior.(3)For the listed companies,to avoid the negative effect of the letter of inquiry,listed companies should pay attention to their own operating conditions,improve information disclosure levels,strengthen internal and external corporate governance,enhance enterprise value,reply in timely detail when receiving the letter of inquiry,eliminate investors’ doubts;Besides,protection of investors should also be strengthened,to ensure that the investors’ rights,disclosure of the major events related to the listed companies on time,alleviate the information asymmetry problem,let investors to timely understand the company’s operations,fully protect the rights and interests of investors. |
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