The Relationship Between Regional Economic Development Degree?Product Market Competition And Stock Price Synchronicity

Stock price synchronization refers to the relationship between the fluctuation of the stock price of a single company and the average fluctuation of the market.Stock price synchronization is an important index to measure the efficiency of security market,and it has become an important field in the research of capital market efficiency and financial market stability.It is an important topic in the current practical field of focus and financial studies.In the current stock market of China,stock price synchronization is very prominent.Research showed that the degree of China share price ranked first in the world in the 40 sample countries.However why the degree of China share price was so severe? Under the external market competition of product market competition,how will the stock price change? But the existing studies on this are very few.This paper selects the data of China Listed Companies in Shanghai and Shenzhen market during 2004—2014 as samples.In the full sample perspective,the paper makes some theoretical analysis on the relationship between product market competition and stock price synchronization,then raises the expected hypothesis.I conduct a preliminary analysis of the relationship between product market competition and stock price synchronization.Then multiple linear regression analysis will be carried out according to the set of models.And I study the effect of product market competition on the stock price synchronicity.Research results show that,in the case of other conditions unchanged,product competition in the market is more furious,the same time the stock price will be more lower.Further,based on the perspective of regional economic development,according to the regional economic development level and the product market competition theory analysis,I study on correlation between product market competition and stock price in different regions.The results show that,in the case of other conditions unchanged,there will be stronger relationship between product market competitions and stock price synchronicity in the developed regions.In order to ensure that the results of the empirical analysis above are correct further,I make some robustness tests by using the calculated different measurement methods of index as a proxy for degree of product market competition,and different measurement methods of stock price synchronicity as an alternative.This paper compares the results of the above empirical results,and examines the robustness of the previous conclusion.The contribution of this paper lies in: it enriches the research literature about product market competition and stock price synchronicity,from the aspects such as information asymmetry theory and management motivation,and this paper studies that the more competitive the product market promotes the improvement of the enterprise information transparency,and the enterprise shares will contain more individual information,which has an impact on share price;Secondly,this paper studies the relationship between product market competition and stock price synchronicity,at the same time this paper introduces regional economic development degree,which is a complement to the related literature on stock price synchronicity,and also supplements the effective capital market theory and expands the application of information efficiency theory;Finally,from the perspective of the content,this research can provide theoretical basis to study the relationship between product market competition and stock price synchronicity,enrich related articles about stock price synchronicity factors and optimize the efficiency of security market in our country.In the point of practice,the degree of product market competition affects stock price synchronicity,and product market competition can be used as external corporate governance mechanism,which can reduce the degree of earnings manipulation,improve the company information transparency,prevent large shareholders from damaging the interests of small and medium-sized investors and institutional investors;Second,this study can strengthen the construction of the legal system,cultivate the professional talents and strengthen the rational investment of investors.In addition,because of the existence of differences in the regional economic development,the capital market allocation of resources is serious imbalance,so as the market invisible hand,the government also wants to play a guiding role,guide resources to underdeveloped areas,realize the optimal allocation of resources of the capital market,so as to enhance the operational efficiency of China capital market.Finally,In the point of content,this paper explores the influence factors of share price synchronicity in our country,finds effective ways to reduce the stock price synchronicity,which can improve the efficiency of capital market in our country.The full text has six parts: firstly,it is the introduction,which states research background,emphasizes the significance,structures the research ideas and methods and summarizes the research content and framework.The following is about literature review,which mainly describes the development and economic consequences of product market competition,the influence factors of share price synchronicity.The third part is the introduction about the theory of product market competition and stock price synchronicity,including describing the relative concepts and basis theory about product market competition and stock price synchronicity.The fourth part is the theoretical analysis and hypothesis.Based on the above theoretical overview,the article analyzes the relationship between regional economic development level,product market competition and stock price synchronicity.Then I propose research hypothesis in this paper.The fifth part is the empirical analysis,including sample selection?the key variables measurement?model set?the empirical results and analysis.In addition,this paper has conducted robustness testing to demonstrate the results of the study further.At the end,the part is about conclusions and policy recommendations.In this section,this article summarizes the conclusions and puts forward relevant policy suggestions.In addition,it points out the research limitations and further research direction.