The intra-industry information transfer effects in China stock market

Because of the correlation of information the disclosure company will affect the other company in the same industry. In this paper, we construct a intra-industry information disclosure model, we get the equation of equilibrium stock price and the cost of capital in condition of correlated information disclosure. We analyze the influence between the disclosure company and the no disclosure company in the same industry. It shows that the equilibrium price and the cost of capital of no disclosure company are related to the correlation coefficient and the precision of information of the company disclosed in the same industry. Based on the empirical study of the China stock market, we confirmed the existence of intra-industry information transfer effect and how it influences the other firms in the same industry.