Evolution of Listed Companies' Information Disclosure System and Stock Market Efficiency in China

This paper investigates the impacts of changes in the quality of corporate information disclosure on the stock market efficiency over a long period which starts from the birth of Chinese stock market, based on the analysis of the evolution of Chinese listed companies' information disclosure system. It is found that the Chinese stock market is still a noisy market, but with the gradual improvement of information disclosure system, both the quality of information disclosure of listed companies and the stock market efficiency have improved step by step. Generally speaking, the synchronization of stock prices in China is positively related to the quality of corporate information disclosure, which means poor market efficiency. However, as time went by and with the improvement of disclosure system, the positive correlation between accounting information quality and stock price synchronization tends to weaken, which indicates that improving accounting information quality can not only help eliminate the uncertainty of investor decision making, but also increase the content of company specific information in stock pricing. Further research shows that the development and participation of institutional investors are conducive to rational trading based on information in the market, noisy trade reduction and market efficiency.