The Study Of The Effects Of The Quality Of Informative Disclosure On The Cost Of Equity Capital

The accounting information is the concentrated reflection of listed companies. Its quality directly influences the effective degree of capital market, the disposition efficiency of social resources as well as the accounting information in the supply-demand balance process. At the same time, the full disclosure of accounting information may save the transaction cost because of reducing the degree of information asymmetry in the release and the transaction process in the stock market.The overseas theory and the empirical research indicated that the increasing level of informative disclosure can reduce the information asymmetry between investors and managers as well as among the investors, reduce the investors'anticipated risk and enhance the fluidity of stock. Thus it can reduce the cost of equity capital. However all the above researches are carried on in mature stock market environment of the developed countries, lack of the thorough discussion on relationship between informative disclosure quality and the cost of equity capital in the emerging market.Therefore, this article takes A stock non-finance companies from 2004 to 2006 on the motherboard in Shenzhen stock market as examples. Then it discusses whether the quality of informative disclosure is helpful in reducing the cost of equity capital of listed companies and the former influencing the latter in what degrees under our country special stock market environment? Among the different characters and scales of the enterprises, whether the relationship between the quality of informative disclosure quality and cost of capital is the same? The researches upon these questions will have the vital significance on arousing listed companies to enhance the informative disclosure on their own initiative awareness, enhancing the information transparency in stock market, reducing the financing cost of listed companies and enhancing the shareholders'value.Using the Ohlson-Juettner Model, this paper calculates the expected capital of cost of the A shares companies. It is found that on the condition of controlling some financial and corporate managing index as well as the dump variables of year and industry, the samples with higher-quality informative disclosure would have lower cost of equity capital. Then I divide the samples by the character of the stockholders and the size of companies. The results of regression is that compared to state-owned listed companies and smaller companies, the quality of informative disclosure has more significant influences on the cost of equity capital in private listed companies and bigger companies.In the end, I give some suggestions depending on the discoveries. First, listed companies should lower the cost of equity capital by means of improving the quality of informative disclosure. For the private companies and bigger companies, they should pay more attentions on the policy of informative disclosure so that they can get more benefits from the lower cost of capital. The independent and fair organizations should also strengthen the appraisal target system of the quality of informative disclosure of listed companies, enhance compulsion disclosure request, increase penalty methods on contrary informative disclosure methods and so on so that enable the real information to transmit to the investors, thus enhance the stock market efficiency.