Will Equity Governance Affect The Synchronicity Of Stock Price

An effective capital market can transmit the information contained in the shares of listed companies and optimize the allocation of market resources.Generally speaking,how much information the company’s stock price can reflect is measured by the stock price synchronicity,which means that the company’s stock price fluctuates with the change of the overall market in a certain period of time,and the consistency between its fluctuation and the price fluctuation of the overall market.Based on the background that China’s current economy is in the transition period,the volatility of stock prices is attracting more and more attention.The participants in the capital market are demanding more and more information.The academic community will focus more and more attention on the topic of stock price synchronicity.After finishing the review of relevant research,the article found that most scholars at home and abroad studied the influencing factors from the external perspective of the enterprise,and few scholars focused on the impact of internal enterprises,especially corporate governance structure,on the synchronicity of stock prices.The existing literature shows that multiple major shareholders have become a common equity governance structure in China’s listed companies.If the a company has multiple major shareholders rather than a single major shareholder,its internal agency problem can be alleviated,and the self-seeking behavior of controlling shareholders can also be curbed.Multiple major shareholders not only help alleviate principle-agent problem of the company,but also help to further curb the self-seeking behaviour of controlling major shareholders.However,multiple major shareholders may cause excessive supervision or collusion,thus discouraging the enthusiasm of the enterprise to transmit information to the outside.So what impact will multiple major shareholders have on the synchronicity of stock prices? Compared with enterprises with only one controlling major shareholder,can multiple major shareholders help enterprises to transmit more information,thus reducing the synchronicity of stock prices? The article focuses on the synchronicity of stock prices,a new perspective,to test whether enterprises can improve their ability to transmit information through stock prices when they have multiple major shareholders.First of all,based on information asymmetry theory,principal-agent theory and behavioral finance theory,the article theoretically analyzes the relationship between multiple major shareholders and stock price synchronicity.Multiple major shareholders reduce the self-seeking behaviour of controlling shareholders and the behavior of concealing information.Thereby reducing the agency problem of enterprises to a certain extent,and prompting more information about enterprises which will be reflected in the stock price,and ultimately effectively reducing the stock price synchronicity.Secondly,the article empirically tested the above assumptions through correlation analysis and multiple regression analysis,and used substitution variables,Heckman two-stage method,explanatory variables and explained variables lag one period,and regression on subsamples to carry out robustness test,ensuring the reliability of regression results.Furthermore,the article introduces intermediary variables to test the impact mechanism of multiple major shareholders on the synchronicity of stock prices,and finds that multiple major shareholders reduce the synchronicity of stock prices by improving the accounting conservatism of enterprises and enhancing the quality of information disclosure of enterprises.Finally,the article discusses the impact of the nature of property rights,the degree of marketization and the relative strength between shareholders on the research conclusion.The results of this study show that:(1)multiple major shareholders can reduce the synchronicity of enterprise stock prices;(2)The reducing effect of multiple major shareholders on the synchronicity of stock prices can be achieved by improving accounting conservatism;(3)The reducing effect of multiple major shareholders on the synchronicity of stock prices can also be achieved by improving the quality of information disclosure;(4)In state-owned enterprises,multiple major shareholders have a more obvious effect on reducing the synchronicity of stock prices.(5)In areas with low degree of marketization,multiple major shareholders have a more significant effect on reducing the synchronicity of stock prices;(6)If other major shareholders of the company have stronger strength,they are more capable to supervise the self-seeking behavior of controlling major shareholders.The company has lower synchronicity of stock prices.The conclusion of the article is helpful for companies to consider the impact of the internal ownership structure on the company’s business development and balance the advantages and disadvantages of the ownership structure of a single major shareholder,and appropriately introduce other major shareholders except the controlling shareholders.The article puts multiple major shareholders,accounting conservatism,quality of information disclosure and synchronicity of stock prices into a research perspective,enriches the literature related to multiple major shareholders and synchronicity of stock prices,emphasizes the role of multiple major shareholders’ governance structures in enterprise information transmission,and at the same time,this research is helpful to popularize multiple major shareholders’ governance structures,It is of practical value to improve the accounting conservatism and information disclosure quality of enterprises and reduce the synchronicity of stock prices of enterprises.