The Information Effect of the New "Securities Law" : Evidence Based on Earnings Forecasts

SUN Jie; WANG Zi-chen

Volume 38 Issue 4

Jul. 2023

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Article Navigation > Journal of Guangdong University of Finance & Economics > 2023 > 38(4): 77-97

SUN Jie, WANG Zi-chen. The Information Effect of the New 'Securities Law' : Evidence Based on Earnings Forecasts[J]. Journal of Guangdong University of Finance & Economics, 2023, 38(4): 77-97.

Citation:

SUN Jie, WANG Zi-chen. The Information Effect of the New "Securities Law" : Evidence Based on Earnings Forecasts[J]. Journal of Guangdong University of Finance & Economics, 2023, 38(4): 77-97.

SUN Jie, WANG Zi-chen. The Information Effect of the New 'Securities Law' : Evidence Based on Earnings Forecasts[J]. Journal of Guangdong University of Finance & Economics, 2023, 38(4): 77-97.

Citation:

SUN Jie, WANG Zi-chen. The Information Effect of the New "Securities Law" : Evidence Based on Earnings Forecasts[J]. Journal of Guangdong University of Finance & Economics, 2023, 38(4): 77-97.

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The Information Effect of the New "Securities Law" : Evidence Based on Earnings Forecasts

School of Accounting, Tianjin University of Finance and Economics, Tianjin 300222, China

Received Date: 2023-02-22
Available Online: 2023-08-17
Publish Date: 2023-07-28

Abstract

Abstract

The "Securities Law" serves as a foundational guarantee for listed companies to provide high-quality information. By utilizing quarterly data from 2018 to 2021 and considering the revised "Securities Law, " this study examines the influence of legal infrastructure on information disclosure. The findings reveal that the application of the new "Securities Law" substantially strengthens the market's response to earnings forecasts and enhances the information quality of such forecasts by listed companies. This conclusion remains consistent even after subjecting it to multiple rigorous tests. The effectiveness of the new "Securities Law" is influenced by the nature of earnings forecasts and the enforcement intensity, thereby achieving a deterrent effect by influencing investors' legal awareness. Following the implementation of the new "Securities Law, " the information quality of management's earnings forecasts is significantly higher than that of analyst predictions, and the information quality of quantitative earnings forecasts surpasses that of qualitative forecasts. The research conclusions provide valuable insights from a legal standpoint for the comprehensively deepening reform of the capital market.
- revised Securities Law,
- earnings forecast,
- information quality,
- information asymmetry,
- deterrent effect

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References(62)

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