Media And The Informativeness Of Stock Price:Theoretical Analysis And Empirical Research

In the capital market, the valuable or not informativeness of stock price is a very important factor that influences the efficiency of resource allocation. Corporate specific information contained in the stock price is directly related to the rationality of stock pricing. In our country’s stock market, however, the phenomenon of "stock price moving in the same direction" is becoming very serious and the stock price has a strong synchronization. As shown in Morck etc.’s research2000, compared with other40major economies globally, China’s stock price conveys valueless information and is ranking the second worse in the world. This situation not only seriously affects the efficiency of resource allocation in our country’s capital market, but also harms the interests of small and medium-sized investors to some degree. With improving the investor perfection law and increasing the transparency of public company’s financial information, media has gradually shown an important role as an external governance power which cannot be ignored. Existing research shows that media has played a positive role in corporate governance, asset pricing and so on. Meanwhile, does the media attention truly perfect the information environment of the capital market? What are the influences that media have on the informativeness of stock price? How it has influences? This paper will try to answer these questions.This paper combines normative and empirical research methods. First of all, it reasonably defines and analysis some concepts such as:media and information, different types of investors and informativeness of stock price; Secondly, it reviews the existing researches on topic of media attention and valuable or not informativeness of stock price; Based on these definition and analysis, the paper also analyzes the mechanism of how media impacts on the information contained in stock price; Furthermore, this paper puts forward three hypotheses:how media impacts on the informativeness of stock price; whether different press content and different nature of media’s attention have different influences on informativeness of stock price. In the end, in the empirical test, this paper has carried on research on aspects of the descriptive statistical analysis and multiple linear regression analysis. Results have proved that media attention can significantly improve the value of informativeness of stock price. Compared with non-negative media press, negative media press will increases more informativeness of stock price. After comparing different nature media’s press, market-oriented media has more influence on the value of information conveyed from stock than political-oriented media.