The Research On The Effect Of The Cost Of Equity Capital By Information Transparency Of Listed Firm

In recent years, information disclosure of listed companies is concerned and attentioned by all parties and the investors's requirements to improve information transparency for listed companies are also becoming stronger. However, in the current stage of development of the stock market, many companies have to reveal information based on the purpose of performance evaluation or issue of shares. Or they rather to reveal false information for regulatory requirements or external pressure from the public etc. And they are not from its own strategic considerations to reveal information effectively. Thus it exist that large amounts of information that is disclosed is not standardized. And, because of these problems, investors always doubt the credibility of information, and the effect of information disclosure is not as expected.In turn, the power of companies to disclose information is affected.Therefore China's healthy development of capital market have been seriously hampered.In recent years, one of the hot area of academic research is information transparency of listed companies'impact on the cost of equity capital. The existing theories abroad discuss interaction between the two in the following three aspects, the stock liquidity, market risk and expected cash flow. Foreign scholars have a large number of empirical studies related to the relationship between them based on a sound disclosure regime and mature capital markets. Many of the empirical results show a significant negative correlation between the information transparency and the cost of equity capital. And because of the system context, these conclusions for the applicability of listed companies in China is to be inspected.This article first comprehensively analysis the impact factors of the cost of equity capital of listed companies, and then select the year 2006-2009, the Shanghai Stock Exchange A share of listed companies as samples, analyze and compare the of information transparency of listed companies'impact on of cost of equity capital by sub-annual.The article selects control variables from stock risk and liquidity, financial position, scale, perspective of corporate governance ect to study the information transparency of listed companies'influence on the cost of equity capital. The empirical study analyzs information transparency's influence on the cost of equity capital from two aspect:early effects and delayed impact. The results show that there is a lag effect of the transparency of information on the cost of equity capital, increased transparency of information in previous years can significantly reduce that year's cost of equity capital, and then the transparency of information and the cost of equity capital is positively correlated in that year. However, analysis of the correlation between the two is not significant, that is, there is no conclusive correlation between the two relationships. This is because the emphasis on information disclosure in China is still in development stage and the special nature of China's stock market.Finally, this article puts forward to policy recommendations corresponding to empirical results and explain the specific disclosure of information phenomenon of the securities market. Based on the above analysis, this paper believes that the specification of disclosure is necessary to promote the sound development of market, and the interests of cost reduction from improveing the transparency of information forlisted companies will become increasingly significant.