Textual Features of Internal Control Evaluation Reports and Pricing Efficiency of Capital Markets
Information disclosure is a powerful tool for building a high-quality capital market.As a supplement to traditional financial information,internal control evaluation reports'textual features have a significant impact on the performance of the capital market.This article takes A-share listed companies from 2013 to 2020 as samples and examines the impact of internal control information disclosure on capital market pricing efficiency from the perspective of textual features.It is found that the lower the similarity of internal control evaluation reports between companies in the same industry and the more idiosyncratic information disclosed,the lower the stock price synchronicity.This conclusion remains valid after a series of robustness tests.Further research finds that in situations where the level of management opportunism is low,the negative relationship between internal control idiosyncratic information and stock price synchronicity is more significant.When a company has governance deficiencies,the degree of digital transformation and product market competition can improve the governance environment,which is conducive to investors integrating internal control information into stock prices through normal trading.In addition,when news media and star analysts pay less attention to listed companies,information content in internal control evaluation reports receives more attention from investors,which can effectively alleviate the degree of information asymmetry and thereby reduce stock price synchronicity.The research conclusion not only enriches the study on the influencing factors of stock price synchronicity,but also provides reference for market participants to interpret internal control information from the perspective of textual features.
internal control evaluation reporttext similarityidiosyncratic informationstock price synchronicity
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