Can core competence help reduce stock price synchronicity? - Empirical evidence based on text analysis

This paper constructs the measurement index of core competence by text analysis method and empirically tests the impact of core competence on stock price synchronicity. We find that the stronger the core competence, the lower the stock price synchronicity, and mechanism test shows that core competen...

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Autores principales: Changling Sun, Hetao Sun, Nian Li, Muhammad Asif Khan, Zixi Zhang
Formato: article
Lenguaje:EN
Publicado: Public Library of Science (PLoS) 2021
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Acceso en línea:https://doaj.org/article/ef62d2fc48624fb6ab738b20ac7a8d41
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spelling oai:doaj.org-article:ef62d2fc48624fb6ab738b20ac7a8d412021-11-18T06:34:40ZCan core competence help reduce stock price synchronicity? - Empirical evidence based on text analysis1932-6203https://doaj.org/article/ef62d2fc48624fb6ab738b20ac7a8d412021-01-01T00:00:00Zhttps://www.ncbi.nlm.nih.gov/pmc/articles/PMC8577773/?tool=EBIhttps://doaj.org/toc/1932-6203This paper constructs the measurement index of core competence by text analysis method and empirically tests the impact of core competence on stock price synchronicity. We find that the stronger the core competence, the lower the stock price synchronicity, and mechanism test shows that core competence reduces the stock price synchronicity by enhancing the transparency of corporate information, which is still valid under a series of robustness tests. Further research shows that:(1) when the corporate governance environment is poor (higher level of internal earnings management, lower quality of accounting information, greater separation of ownership and control, lower shareholding ratio of external institutional investors, weaker product market competition, less media attention), the core competence has a more significant effect on the decline of stock price synchronization; (2)vertically, the dynamic improvement of core competence in the time dimension can play a role in stabilizing stock price synchronization; (3)after distinguishing the types of core competence, we find that the core competence related to information disclosure is more helpful to reduce the stock price synchronization; (4)after the CSRC forces listed companies to disclose the core competence information in the annual report, the core competence plays a stronger role in reducing the stock price synchronization. This study reveals the important role of core competence in reducing stock price synchronization. It not only enriches the relevant literature of core competence and stock price synchronization, but also has important practical significance for the government and regulatory departments to improve the efficiency of capital market allocation.Changling SunHetao SunNian LiMuhammad Asif KhanZixi ZhangPublic Library of Science (PLoS)articleMedicineRScienceQENPLoS ONE, Vol 16, Iss 11 (2021)
institution DOAJ
collection DOAJ
language EN
topic Medicine
R
Science
Q
spellingShingle Medicine
R
Science
Q
Changling Sun
Hetao Sun
Nian Li
Muhammad Asif Khan
Zixi Zhang
Can core competence help reduce stock price synchronicity? - Empirical evidence based on text analysis
description This paper constructs the measurement index of core competence by text analysis method and empirically tests the impact of core competence on stock price synchronicity. We find that the stronger the core competence, the lower the stock price synchronicity, and mechanism test shows that core competence reduces the stock price synchronicity by enhancing the transparency of corporate information, which is still valid under a series of robustness tests. Further research shows that:(1) when the corporate governance environment is poor (higher level of internal earnings management, lower quality of accounting information, greater separation of ownership and control, lower shareholding ratio of external institutional investors, weaker product market competition, less media attention), the core competence has a more significant effect on the decline of stock price synchronization; (2)vertically, the dynamic improvement of core competence in the time dimension can play a role in stabilizing stock price synchronization; (3)after distinguishing the types of core competence, we find that the core competence related to information disclosure is more helpful to reduce the stock price synchronization; (4)after the CSRC forces listed companies to disclose the core competence information in the annual report, the core competence plays a stronger role in reducing the stock price synchronization. This study reveals the important role of core competence in reducing stock price synchronization. It not only enriches the relevant literature of core competence and stock price synchronization, but also has important practical significance for the government and regulatory departments to improve the efficiency of capital market allocation.
format article
author Changling Sun
Hetao Sun
Nian Li
Muhammad Asif Khan
Zixi Zhang
author_facet Changling Sun
Hetao Sun
Nian Li
Muhammad Asif Khan
Zixi Zhang
author_sort Changling Sun
title Can core competence help reduce stock price synchronicity? - Empirical evidence based on text analysis
title_short Can core competence help reduce stock price synchronicity? - Empirical evidence based on text analysis
title_full Can core competence help reduce stock price synchronicity? - Empirical evidence based on text analysis
title_fullStr Can core competence help reduce stock price synchronicity? - Empirical evidence based on text analysis
title_full_unstemmed Can core competence help reduce stock price synchronicity? - Empirical evidence based on text analysis
title_sort can core competence help reduce stock price synchronicity? - empirical evidence based on text analysis
publisher Public Library of Science (PLoS)
publishDate 2021
url https://doaj.org/article/ef62d2fc48624fb6ab738b20ac7a8d41
work_keys_str_mv AT changlingsun cancorecompetencehelpreducestockpricesynchronicityempiricalevidencebasedontextanalysis
AT hetaosun cancorecompetencehelpreducestockpricesynchronicityempiricalevidencebasedontextanalysis
AT nianli cancorecompetencehelpreducestockpricesynchronicityempiricalevidencebasedontextanalysis
AT muhammadasifkhan cancorecompetencehelpreducestockpricesynchronicityempiricalevidencebasedontextanalysis
AT zixizhang cancorecompetencehelpreducestockpricesynchronicityempiricalevidencebasedontextanalysis
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