Empirical Study On The Internal Governance Structure,Management Characteristics And Value Creation Effect Of M&A Of The Listed Media Companies In China

As an important part of Cultural Industry in China,Media Industry plays an important role in the development of national economy.In recent years,due to the rapid development of Internet and new media technology,the Media Industry is in the process of system reconstruction,Dynamic transformation and paradigm transformation.In this case,as the representative of advanced productivity in the media industry,the listed media companies combine endogenous cultivation with M&A in order to achieve strategic transformation and upgrading.Since 2011,the number of M&A cases and transaction amounts of listed media companies has grown rapidly.As an important way of investment,M&A has been favored by the shareholders and management of listed media companies.According to the theory of value management,the purpose of M&A is to create value for shareholders.Do the listed media companies create value in M&A practice? Existing researches has not solve this problem.Motivation is the starting point of M&A,there will be a connection between “M&A motivation-M&A behavior-enterprise value”.From the perspective of maximizing value,there is a research gap between different motivations and value creation.Based on principal-agent theory and high-level echelon theory,we can see that internal governance structure is the basic guarantee of value creation,and management characteristic is an important factor affecting corporate decision-making,will have any impact on the value creation effect of M&A of the listed media companies? The pending issues and research gaps become the starting point of this paper.The issues in this paper can be summarized as follows:(1)How to construct the theoretical analysis framework of value creation effect of M&A of The Listed Media Companies in China by combining M&A motivation,internal governance structure and managerial characteristics?(2)Whether the M&A of listed media companies could create value or not.,what is the different in value creation effects of M&A with different motivations?(3)What is the impact of Internal Governance Structure and Management on the Value Creation of M&A? This paper combines normative research and empirical research to analyze the research issues.Based on the theory of M&A motivation and the content of M&A announcement of listed media companies,this paper divides M&A events of listed media companies into synergistic motivation M&A,enterprise growth motivation M&A,specific resource motivation M&A and market share motivation M&A according to motivation.Base on the economic theories of scale economy,scope economy and transaction cost and the management theories of competitive strategy theory and resource-based theory,combined with the existing research conclusions,we analyzed the mechanism of value creation in different motivations of M&A.From the perspective of principal-agent theory,this paper analyses the influence mechanism of internal governance structure of listed media companies on value creation effect of M&A from three aspects: ownership structure,board structure and incentive system.Based on the high-level echelon theory and the resource-based view,this paper divides the characteristics of management into the characteristics of social capital and ability,and analyses the mechanism of its influence on the value creation effect of M&A.At the same time,combined with the view of institutional basis,analyses the interaction between formal institutional factors and informal institutions factors on value creation effect of M&A.The two formal institutional factors are government intervention and market environment,the informal institutional is social capital of management.Constructed the theoretical analysis framework of internal governance structure,management characteristics and value creation effect of M&A of the listed media companies.This paper analyses whether M&A of listed media companies can create value,the difference of value creation effect between M&A of different motivations,the mechanism of internal governance structure and management’s influence on value creation effect of M&A,and puts forward a series of research hypotheses as the basis of empirical analysis.In the empirical analysis,this paper chooses 100 M&A events of listed media companies in Shenzhen and Shanghai Stock Exchanges from 2008 to 2015 as the total sample,divides into four samples according to the motivation.This paper constructs a short-term value creation measurement model based on Market Model and a long-term value creation measurement model based on Paired Sample Portfolio,calculate the short-term and long-term value creation effects of the whole sample of M&A and the Motivation Factor Sample of M&A.To answer the question of whether M&A of media listed companies creates value and what difference exists in value creation effect of M&A with different motivations in business practice.On the basis of these results,this paper examines the impact of internal governance structure on value creation in listed media companies from three aspects: ownership structure,board structure and incentive system.Using the social network analysis method and the improved managerial ability model,this paper quantifies the social capital and managerial ability in the sample,and analyses the impact of management characteristics on the value creation effect of M&A.Through empirical analysis,we find that,the M&A just created a few value in the short term.In the long period(3 years),the corporate value of listed media companies is seriously damaged.And there are obvious differences in value creation between M&A of different motivations.From the perspective of M&A motivation:(1)The shortterm value creation of M&A driven by synergy is relatively better,but the long-term value creation is the worst;(2)Specific resource-driven M&A creates value more rapidly in the short term,but not sustainably and poorly in the long term;(3)Market share motivation M&A and enterprise growth motivation M&A can not create value in the short term,but in the long term value creation is better than the other two kinds of motivation M&A.The internal governance structure of listed media companies has a significant impact on the value creation of M&A.In terms of ownership structure:(1)Equity concentration has no significant impact on the short-term value creation effect of M&A.In the long term after the announcement of M&A,equity concentration has a significant positive impact on the value creation effect of M&A,and has a greater impact on stateowned listed media companies.(2)Equity checks and balances significantly promote the value creation effect of M&A.In the long term afer M&A,quity checks and balances play a greater role in promoting the value creation effect of mergers and acquisitions of Private listed media companies.(3)There is a negative relationship between the proportion of institutional ownership and the creation effect of M&A,and there may be speculative behavior in M&A driven by market share.(4)The short-term value creation effect of state-owned listed media companies is significantly lower than that of private companies.In the long term after the announcement of M&A,there is no significant difference in the value creation effect between state-owned listed media companies and private companies.However,in the M&A of enterprise growth motivation,state-owned media listed companies are more concerned about the shortterm promotion of target enterprises to their own operating conditions,which is prone to false prosperity.(5)The proportion of state-owned shares is not conducive to the value creation effect of M&A.The board system of listed media companies fails in value creation on M&A:(1)The size of board and the proportion of independent directors have a negative impact on the value creation of M&A.The size of board has a greater negative impact on private listed media companies,while the proportion of independent directors has a greater negative impact on state-owned listed media companies.(2)Duality of CEO and chairman is not conducive to the value creation of M&A and this negative impact is more serious for state-owned listed media companies.In terms of management incentive system:(1)Salary incentive is negatively correlated with short term value creation effect of M&A.In the long term,it has no significant correlation with value creation effect.Salary incentive has not brought about the improvement of value creation effect of M&A.(2)There is an inverted U-shaped relationship between on-the-job consumption and the short term value creation effect of M&A.When the proportion of on-the-job consumption in revenue does not exceed 12.5%,it can effectively promote the short term value creation effect of M&A,but it has a negative impact on the long term value creation effect of M&A of state-owned listed media companies.(3)Equity incentive has a negative relationship with short-term value creation effect of M&A,but it can improve the long-term value creation effect of M&A,and the incentive effect on executives of listed private media companies is better than the executives of state-owned listed media companies.The Management characteristics of listed media companies have a significant impact on the value creation effect of M&A.(1)There is an inverted U-shaped relationship between firm affiliation and value creation effect of M&A.When the degree-centrality of enterprise affiliated network is no more than 6 and the degree of intermediary center is no more than 4.9,the information resources advantage brought by enterprise affiliation can effectively promote the value creation effect in M&A.(2)There is a negative relationship between the political related capital and the short-term value creation of M&A.In the long term,the negative impact of political connection on private listed media companies is significantly greater than that of state-owned listed media companies.(3)Financial related capital can promote the value creation effect of private media listed companies,but have a negative effect on state-owned listed media companies.(4)As an informal system,managerial social capital can play an alternative role in the case of imperfect formal system.(5)Managerial ability can significantly promote the value creation effect of M&A.Giving higher executive power to highability management will help to realize value creation effect in M&A.The media listed companies has a large number of stakeholders in M&A,it requires the combined action of shareholders and management,market investors,government supervisors and regulatory authorities of media listed companies to enhance the value creation of M&A.