Does Regulation of Annual Reports Influence Equity Capital Cost?-Insights for Strengthening Financial Oversight
Based on the data of A-share listed companies from 2015 to 2020,this paper studies the economic consequences of China's regulatory inquiry mechanism from the perspective of equity capital cost.The results show that companies that receive annual report inquiries face higher equity capital cost than those that do not.On this basis,we use the mediating effect test to confirm that investor confidence is an effective path to affect theequity capital cost.Further analysis shows that analysts are not inclined to track and forecast the companies that have been issued inquiry letters;however,the equity capital cost of companies that have received restructuring letters is lower on the contrary.As a main means of post-mortem supervision,the supervision in the form of inquiry letter of China's stock exchange will not lose its effectiveness because of its non-punitive nature.Regulatory inquiry can not only help investors adjust investment decisions in time,but also alert listed companies to actively regulate their information disclosure behavior.
regulatory inquiryequity capital costinvestor confidence
万方数据
