Abstract
To analyze the problem of information asymmetry between investment institutions, investors, and entrepreneurs, thereby protecting the interests of all parties and ensuring the income under high risks, some companies listed on Shanghai Stock Exchange and Shenzhen Stock Exchange are taken as research samples. First, the relations between investment institutions, investors, and entrepreneurs, as well as the causes and solutions of information asymmetry in venture capital, are analyzed. Second, based on the residual model, a model that analyzes the information asymmetry and investment efficiency of the enterprise is built. Finally, through two cases, the relation between the information asymmetry and the investment rate is revealed. The research results show that from 2014 to 2018, the investment level of companies listed on the Shanghai Stock Exchange and Shenzhen Stock Exchange was below 7.69%; the investment levels of different companies varied greatly, with significant differences in the development situations. Besides, information asymmetry is significantly related to investment efficiency. The corresponding regression coefficient is 0.0119. The larger the enterprise is, the higher the investment efficiency will be. The case analysis shows that it is important to understand and seize the market, and the information asymmetry between the actual environment and the investment environment is more serious. To deal with these issues, material incentives, reputation incentives, control incentives, and stock option incentives are substantive measures that can be taken, which are of great significance for improving the decision-making level of investors and investment institutions and reducing the investment risk of investors and entrepreneurs.
Highlights
With the rapid development of traditional industries and the information industry, the concept of “big data” has begun to play a role in people’s daily lives
The results showed that the estimation of the information portion and the information asymmetry was in negative correlation, while the estimation of fuzziness is positively correlated with information asymmetry (Bushee et al, 2018)
By analyzing the situation where information asymmetry leads to losses, this study proposes corresponding solutions to the venture capital problem in China’s financial market
Summary
With the rapid development of traditional industries and the information industry, the concept of “big data” has begun to play a role in people’s daily lives. In all the interest-related trading activities, problems with information exist. The decision-making of transactions is generally based on incomplete and asymmetric information. This asymmetric information and its impact are more prominent in the capital market. In the trading behavior of the capital market, there is often a huge conflict of interest, and asymmetric information provides opportunities for fraud and unethical behavior in pursuit of interest. The problem of information asymmetry has become the focus of many researches. The ability to invest institutions, funders, and entrepreneurs in venture capital to obtain information is the same. The information asymmetry truly exists, which will become a factor that will bother the three parties (Han and Zhang, 2016). The weakening of information asymmetry and even its solution is the focus of attention of all sectors of society
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