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| A Study of the Effect of Regulatory Minority Shareholders on Stock Price Synchronization |
| LI Shu，JIN Zhen，XIE Yanxiang，GENG Mingyang |
| 1.Nankai University, Tianjin, China; 2.Chinese Academy of Fiscal Sciences, Beijing, China |
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Abstract Based on the research scenario of the pilot shareholding exercise of China Securities Investor Services Center (ISC) in February 2016, this study investigates the impact of ISC on the stock price synchronicity by using the DID method. The results show that as a regulatory minority shareholder, the shareholding and exercise of the ISC reduces the stock price synchronicity of companies. Furthermore, the impact of ISC on stock price synchronicity is more significant when analysts pay less attention and media reports are less. The mechanism test shows that after the establishment of ISC, the quality of information disclosure and the quality of management’s performance forecast have been improved, resulting in an information effect. The exercise of the rights of ISC has attracted the attention of the media and regulatory authorities, which reduces the encroachment of large shareholders and raises the enthusiasm of small and medium-sized shareholders to participate in the shareholders’ meeting, thereby exerting governance effects.
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Received: 26 September 2022
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