The Impact Of Information Disclosure Quality Of GEM Enterprises On The Cost Of Equity Capital

Equity financing is the main financing method for GEM enterprises with high growth.The cost of the equity will ultimately affect the intrinsic value of the company.Existing research has found that the important factor affecting the cost of equity capital of an enterprise is the quality of information disclosure,but the research conclusions are not the same.At the same time,under the current political.and economic environment in China,it is increasingly common for companies to build political connections.For high-tech companies on GEM,political connections do bring more innovative resources to them and improve the company's ability to innovate.Some scholars have further discovered that political associations will also have a certain impact on the quality of corporate information disclosure and the Cost of Equity Capital of an enterprise However,there is little research on the impact of corporate political association on the relationship between information disclosure quality and the cost of equity capital of an enterprise.In view of this,this paper intends to study the relationship among information disclosure quality,the cost of equity capital,and political connections through empirical analysis.Firstly,this paper systematically reviews and sorts out the relevant information disclosure quality,the cost of equity capital,and related literature on political connections.Then,based on this,it takes GEM listed companies as research objects,draws on existing literature,and assesses inforamation disclosure ratings and earnings quality.To measure the quality of information disclosure,empirically test its impact on the cost of equity capital using multivariate regression methods,and incorporate political relevance into the research framework to test its regulatory role on the aforementioned relationship.The research results show that:(1)The higher the information disclosure rating,the lower the cost of equity capital.(2)The higher the level of earnings management,ie,the lower the earnings quality,the higher the cost of equity capital.(3)Political association does not have a significant regulatory effect on the relationship between information disclosure ratings and the cost of equity capital.(4)Political connections can weaken the inhibitory effect of earnings quality on the cost of equity capital of an enterprise.This study not only further deepened the theoretical knowledge of the quality of information disclosure,the cost of equity capital,and the relationship between them,but also analyzed the regulatory effects of political linkages to provide an opinion for enterprises to make effective business decisions and regulate the trading behavior of the securities market.