Accounting Information and Stock Price Reaction (Article Sample)
The article, "Accounting information and stock price reaction of listed companies—empirical evidence from 60 listed companies in Shanghai Stock Exchange" by Wang, Fu, and Luo (2013) reveals that the stock market of China has a significant development in the capacity of the market. Therefore, due to the rapid development of the stock market, the authors find it useful to examine whether there is adequate correlation between the share price circulation of China's enterprise and its accounting information in the long run. The article analyzes the relationship between accounting information and stock price, drawing a sample of 60 listed firms on the Shanghai stock exchange. The authors first analyze the representative indexes of accounting information of annual reports before building and exploring the regression model of accounting information and stock price reaction. The authors relied on secondary data obtained from websites and companies' annual reports, analyzing data using the multiple regression technique and Pearson correlation analysis.
source..Wang, J., Fu, G., & Luo, C. (2013). Accounting information and stock price reaction of listed companies—empirical evidence from 60 listed companies in Shanghai Stock Exchange. Journal of Business & Management, 2(2), 11-21.
The article's authors begin by illustrating the reform of china's enterprises and the development of the market economy; china's stock market has a significant development in the market capacity, trade varieties, and means of exchange, supervision rules, and settlement system. In the process of rapid development of the stock market due to the policy and management structure, the country's stock market gets better and better in multiple facets. There is a need thus to investigate the existing correlation between the circulation share price of china's enterprise and its accounting information in the long run. The existing literature by other researchers indicates a significant correlation between accounting information and stock price. However, according to the authors, the preceding studies focused on the correlation between accounting earnings and stock price, the relationship between accounting information and stock price, and how the accounting information affects the stock price. This paper thus focuses on the correlation between accounting information and stock price reaction in fundamental stock markets.
This paper analyzes the accounting information of listed companies and stock price reactions. A study of the different types of accounting information indexes of annual report disclosure and price reaction indirectly discloses the relation between accounting information of china's listed company annual report disclosure and stock price and offers valuable references to investors. The study randomly selected 60 listed
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