MD&A Disclosure, Financial Performance and Market Reaction-Empirical Evidence from Shanghai Stock Exchange in China

In the early 2012, the Shanghai Stock Exchange issued the Fifth Memorandum of the Listed Companies' 2011 Annual Report-a Preparation Requirements of Management Discussion and Analysis(hereinafter referred to as the Preparation of Requirements). The regulatory authorities pay more and more attention to the MD & A, the study built disclosure quality evaluation of MD & A(management discussion and analysis)information according to the preparation of requirements, selected 220 listed companies from Shanghai A-share as samples, proposed hypotheses and established regression models to make a research on the usefulness based on the disclosure quality of MD & A information. The study found that: to some extent, the quality of MD & A information has positive relation to the current financial performance, can predict future financial performance and cause short-term market reaction.