Education, Science, Technology, Innovation and Life
Open Access
Sign In

A Study on the Mechanism of Speculative Behaviour of "Splits" in Financial Market Firms: Based on Value-Added Theory Perspective

Download as PDF

DOI: 10.23977/ferm.2022.050509 | Downloads: 12 | Views: 118

Author(s)

Meng Chen 1

Affiliation(s)

1 School of Sociology, Central China Normal University, Wuhan, 430000, China

Corresponding Author

Meng Chen

ABSTRACT

Functionalism encompasses both social structures and social action, the practical and instrumental nature of actions as well as the ideational and end-oriented nature of actions. Companies that are listed are autonomous in their decision-making regarding dividend distribution, and speculation about 'splits' is common. The "insiders" take advantage of the low level of information among the public participants in order to induce and contribute to emotional energy in the securities market, resulting in structural misconduct. The "insiders" contribute to the emotional energy of the securities market by exploiting the low information level of the public participants. As a result of "splits", market emotions, and individual profit motives and goals, the noise of splits creates cognitive or group complexity. "Splits" are the result of a combination of group or cognitive "conspiracies" that generate dependency and consistency in social action, resulting in irrational outcomes for individuals suffering from limited rationality within the market action unit. In the recent years, the SFC has cracked down on disguised "split" speculation in accordance with the law, strengthened institutional constraints, monitored system implementation, eased public distrust and conflict confrontation towards the market, and protected the rights and interests of market participants. Based on the neo-functionalist Smelser's accrual value theory, this study examines the mechanism of market participants' speculative behavior in the "splits" of listed companies in the financial market from the viewpoint of social structure, generalized emotional arousal, and socialized institutional control.

KEYWORDS

"split" hype, generalised emotional action, value-added theory

CITE THIS PAPER

Meng Chen, A Study on the Mechanism of Speculative Behaviour of "Splits" in Financial Market Firms: Based on Value-Added Theory Perspective. Financial Engineering and Risk Management (2022) Vol. 5: 69-76. DOI: http://dx.doi.org/10.23977/ferm.2022.050509.

REFERENCES

[1] Tao He, Xiaoyue Chen. (2003) A preliminary study on the motivation of Chinese listed companies to send shares and increase shares. Journal of Financial Research, 9, 44-56.
[2] Zhanyu Ying. (2004) Equity split, incentive problem and dividend policy -- the mystery of dividend in China and its causes. Journal of Management World, 7, 108-119+126-156. DOI: 10. 19744/j.cnki.11-1235/f.2004.07.014.
[3] Zhihua Wei, Changqing Li, Yuhui Wu, Jiajia Huang. Semi compulsory dividend policy, refinancing motivation and classical dividend theory -- An Empirical Study Based on dividend agency theory and signal theory. Accounting Research, 2017(07): 55-61+97.
[4] Jinyan Shi, Yushan Han, Si Cen Guo. (2019) The bond market reaction of "split" -- An Empirical Study Based on signal transmission theory. Journal of Northeastern University (Social Science), 21, 1, 20-27.DOI:10.15936/j. cnki.1008-3758.2019.01.004.
[5] Thanwarat Suwanna. (2012) Impacts of Dividend Announcement on Stock Return. Procedia - Social and Behavioral Sciences, 40, 721–725
[6] Haijing Cai, Chao TAN. (2018) Financial performance heterogeneity, split and shareholder excess return. Collected Essays on Finance and Economics, 2, 78-85. DOI: 10. 13762/j.cnki.cjlc.2018.02.007.
[7] Kanwal Iqbal Khan, Muhammad Aamir, Arslan Qayyum, Adeel Nasir, Maryam Iqbal Khan. (2011) Can Dividend Decisions Affect the Stock Prices: A Case of Dividend Paying Companies of KSE. International Research Journal of Finance and Economics ISSN 1450-2887 Issue 76.
[8] Yongjun Qi, Xiaoyu Zhang. (2022) Senior management's stock reduction, investor sentiment and company's transfer behavior: Based on the comparison before and after government regulation. Scientific Decision Making, 1, 1-20.
[9] Fengming Xie, Guoping Yu, Zhiyu Lu, Pengfei Zou. (2019) Is split a pie or a trap? — Research on Chinese A-share listed companies. Finance and Economy, 1, 28-32+96. DOI: 10.19622/j.cnki.cn36-1005/f.2019.01.004.
[10] Ping Cheng, Jianjun Wang. (2017) Is the split dividend policy really a cash out "tool"? —— Empirical evidence from A-share market. Scientific Decision Making, 7, 1-25.
[11] Changcheng Zhou, Yanmin Yin. (1999) Sociological perspective of financial market. Sociological Studies,6, 79-92. DOI: 10. 19934/j.cnki.shxyj.1999.06.006.
[12] Dian Yang, Xuanyu Ouyang. (2021) Financial research from the perspective of Sociology: development context and main issues. Chinese Review of Financial Studies, 13, 4, 1-11+123.
[13] Yifeng Yang. (2012) Weber's exposition on securities trading and research topics of contemporary financial Sociology. Lanzhou Academic Journal, 10, 117-122.
[14] [US] Stephen weins. Panic and opportunity: how to grasp the risks and opportunities in the stock market turmoil. Beijing: China Machine Press, 2010
[15] Wang Dingding. (2010) Basic problems of behavioral finance. Research on Financial and Economic Issues, 7, 3-11.

Downloads: 3375
Visits: 113857

All published work is licensed under a Creative Commons Attribution 4.0 International License.

Copyright © 2016 - 2031 Clausius Scientific Press Inc. All Rights Reserved.