Accounting information and stock price reaction: An empirical evidence from China’s A-shares stock market

Abstract

The purpose of this study is to examine whether firms’ accounting information has an impact on stock price reaction. This study used a stepwise multiple linear regression model to analyze the data. Using a large sample data of Chinese listed companies from 2008-2018, this paper finds that accounting information on profitability, liquidity, operational efficiency is positively related to stock price reaction. Debt to equity also has a positive relationship with stock price but debt to asset ratio has a negative correlation to stock price. This study provides a comprehensive view of China’s stock market by investigating both the Shanghai and Shenzhen Stock Exchange.