Stock Price Synchronicity Changes under the Accountability Systems for Errors:Caution on the Unintended Institutional Effects
The accountability system for errors plays a significant role in corporate internal governance,yet its potential unintended consequences are often overlooked.From the unique perspective of stock price synchronicity,this issue is thoroughly explored by using the data from A-share listed companies from 2007 to 2022.By constructing a difference-in-differences(DID)model,the impact of the error accountability system on stock price synchronicity is precisely analyzed.The research results show that after implementing this system,the stock price synchronicity of companies has increased significantly,especially in companies where accrual earnings management has decreased but real earnings management has increased,and where the readability of annual reports has decreased,this effect is more pronounced.Further research finds that companies with less management shareholding and fewer analyst tracks are more affected by this system.In addition,the increase in stock price synchronicity has led to an increase in the company's cost of equity capital and a decrease in investor confidence.The study reveals that the error accountability system may trigger strategic behavior of management in earnings management and information disclosure,thereby reducing the efficiency of stock pricing.Agency conflicts and the lack of external supervision are key factors in inducing these unintended effects.The research results not only deepen the understanding of the unintended effects of corporate internal governance mechanisms,but also provide an important reference for regulatory authorities on formulating relevant policies,in order to be vigilant and deal with possible unintended consequences.
the accountability system for errorsstock price synchronicityearnings managementreadability of annual report
万方数据
维普
