Ownership Concentration, Audit Quality And Stock Price Synchronicity

The synchronicity of return variation means that stock prices move in the same direction together, which implies that firm-specific information is not fully capitalized into stock prices. This phenomenon not only eliminates the difference in companies of sorts and weakens the economic role of prices that serve as signals for investment decisions, but also decreases the resource allocation efficiency of the stock market.This paper studies ownership power and audit quality to the number of the influence of specific information into the stock price, measured with stock prices synchronicity. Measurement, we enrolled China's listed companies during 2007-2009.We pointed out that the two main research results: first, ownership restriction is decided synchronicities a factor. Specifically, we adopt other big shareholders (i.e., the second largest shareholder to fifth shareholders) out of a scale the sum and share ratio of the largest shareholder equity ratio of balances measured degree. The empirical results prove the balances with the degree of the stock price rise, synchrony declined, i.e., when other big shareholders of the first largest shareholder, then formed when stock prices synchrony lower. Second, we found appointed "big four" as the international auditor is low, they support synchrony one view of high quality auditors help the company characteristics information more reliable flows into the market. Third, in ownership restriction, audit quality negatively related to the stock price synchronicity. Namely in ownership restriction cases, choose the "big four" as auditor low stock synchronicity.Finally, we produce stock prices synchronicity simple reason, analysis and make to improve China's stock market share price synchronicity suggestions.