Research On The Impact Of Negative Media Reports On The External Governanceof Companies

The ownership and management right of modern enterprises are usually separated,which leads to the information asymmetry between the board of directors and management,the large shareholders and the small shareholders.The superior party of information make decisions that are more favorable to the interests of their own parties,but may infringe on the interests of other stakeholders.This is the reason for the emergence of corporate governance.As a third-party independent organization,media is the independent organization of the third party,Through the investigation of enterprises,media can alleviate the information asymmetry to some extent by showing the real side of the enterprise to the public.Foreign scholars,Dyck and Zingales have used practical cases to study the relationship between negative media reports and external governance of Listed Companies in the 1990 s.Then domestic scholars also used cases to demonstrate the relationship between negative media reports and the external governance of domestic listed companies,but the conclusions are different.Some scholars believed that when the governance problems of enterprises are reported by the media,the enterprises corrected their own behaviors,but some studies shown that companies ignored the market reports and adhered to their own behavior.In 2010,Shen Yifeng and others used A-share market data and media negative report data to demonstrate that negative media reports have a positive effect on corporate external governance.Since then,a large number of scholars have conducted empirical research on there,and most of the results supported the conclusion.The previous research results mainly include media to achieve external governance through reputation mechanism or administrative intervention mechanism.In order to reduce negative media reports,the management of the company conduct earnings management or reduce innovation and research,and the research mainly focused on the data in 2013 and previous years in a row.But with the popularity of Internet in recent years,the development of capital market,especially the attention of government regulatory agencies to the media industry,they have changed.Whether the negative media reports have changed on the external governance of the company is a question worth exploring.Based on the previous research,this paper explores the changes and reasons of the negative media reports on the external governance of the company in recent years.In addition,previous studies have shown that there are differences between state-owned enterprises and non-state-owned enterprises,among which state-owned enterprises are more obvious.Therefore,this paper explore the changes and reasons of the negative media reporting of external governance in state-owned enterprises and non-state-owned enterprises;Considering the high degree of marketization,local government intervenes in local media,so it also studies the changes and reasons of the external governance of negative media reporting in the high degree of marketization.This paper uses econometric empirical research method,constructs regression model,analyzes the results and draws conclusions.The statistics of the number of Listed Companies in each year.Considering the adequacy of samples,the listed companies in 2000-2010 are finally determined to be collected.The selected enterprises are excluded from the companies classified as financial industry by CSRC industry.The reasons for elimination are as follows: first,the financial industry is affected by national policies,and the other is the particularity of accounting of financial listed companies,Third,the state currently implements the equity incentive restrictions on financial listed companies.In addition,all ST Companies in the study year were excluded,because of their own performance,there were more negative media reports,and the number of final sample companies was 919.The data of 2020 of listed companies have not been published during the writing period.In addition,the variables in the model need to consider the lag factors,so the variable data year is 2012-2017.Through the previous literature,combined with the problems of this paper,the model is constructed.The negative report data of explanatory variable media in the model is derived from the full text database of China important newspapers of CNKI.All the negative reports of 919 enterprises are retrieved manually,downloaded one by one,and the final negative reports of the enterprises are determined by verification.In addition,the ownership nature,the degree of regional marketization,the financial information of the company,the proportion of different types of shareholder shares,and the factors of equity incentive,profitability and operation ability ignored by previous studies are selected as control variables.The variation rate of Tobin Q was selected for the explanatory variable,and the robustness test was also performed by the change rate of ROE.The research shows that negative media reports have played a positive role in external governance of the company in 2012-2015,but the correlation coefficient in 2015 is not significant,while in 2016 and 2017,the correlation coefficient is negative.Further research finds that,during 2012-2014,the supervision department has issued the self-inspection and inspection of listed companies and the promulgation of relevant policies on media supervision,which guarantees the supervision role of media,but there are no relevant policies and measures in the subsequent years.Therefore,the negative media report has a greater impact on the external governance of the company by policies and regulations.The negative correlation phenomenon may be due to the strict supervision of listed enterprises by government departments after the market clearing in the previous years.The reported enterprises often have serious problems,which leads to the distrust of suppliers and consumers.In addition,in recent years,the media are keen to report a company with serious problems so as to get more market attention.However,the negative media reports in state-owned enterprises have been playing a role in the external governance of the company,and the management of state-owned enterprises pay no attention to the negative media reports.In non state-owned enterprises,negative media reports play a positive role in external governance of the company in 2012-2015,but the correlation coefficient in 2016 and 2017 is negative,which is due to the fact that non-state-owned enterprises attach more importance to their own development,and do not value negative media reports,especially the media supervision right has not been further guaranteed.The negative media reports have the same effect on the external governance of the company in the enterprises with high marketization.On the one hand,there are more non-state-owned enterprises in the high market-oriented areas,on the other hand,the local governments intervene in the local media reports under the pressure of no policies and supervision from the perspective of protecting local enterprises.In conclusion,this paper holds that the government regulatory agencies should actively promote and implement relevant policies and systems,and guarantee the right of media participation,the right to know and the right to supervise.In addition,the media should pay more attention to non-state-owned enterprises and enterprises in high market-oriented areas.Enterprises need to solve their own problems in time to avoid affecting the subsequent development of enterprises.The innovation points of this paper as follows: first,the paper explores the changes of the negative media reports on the external governance of the company,further studies the policy reasons behind it,and the research results effectively supplement the existing system;Secondly,the paper studies the governance effect of negative media reports on the external of the company in the non-state-owned enterprises that have been neglected in the past;Thirdly,a model which can reflect the negative media reports on the external governance of the company is constructed.The equity incentive factors,profitability and operation ability ignored by previous scholars are selected as control variables.