Research On Media Coverage,CEO Turnover And Capital Structure Dynamic Adjustment

Capital structure refers to the composition and proportion of various capital sources of a company.The theory of dynamic adjustment of capital structure holds that there is an optimal capital structure in a company.As the actual person in charge of the company's daily operation activities and strategic decisions,the cognition and behavior of CEO determine the company's capital structure adjustment activities.Since the utility functions of managers and shareholders are not consistent,it is very difficult to expect self-interested managers to act according to the wishes of shareholders and choose the capital structure that maximizes enterprise value under the circumstances of information asymmetry and incomplete contract.As a hot issue in the field of corporate governance,CEO turnover is regarded as the most severe and direct punishment for executives,but whether the incompetent executives can be effectively identified and replaced in time depends on the effectiveness of corporate governance.At present,the internal governance mechanism of listed companies in China needs to be improved,and the legal system of the capital market is not perfect.Therefore,more external forces are needed to supervise and restrain the behaviors of CEOs and the board of directors.As the collector,processor and disseminator of information,news media is called the fourth power in western countries.Then in China's capital market,can the media,as a stakeholder of listed companies,play its role as an external governance mechanism to effectively prompt the board of directors to replace incompetent executives? How will the nature of media coverage affect board decisions? Will the company's recapitalization speed increase or decrease after CEO turnover? How will the personal characteristics of executives affect the dynamic adjustment of capital structure? What is the transmission mechanism between media coverage,CEO turnover and capital structure dynamic adjustment?According to the problems above,this paper combined with the economic development of Chinese capital market and financial media under the new norm of the status quo,from the perspective of corporate governance,in combing media coverage,the change of the executive and the capital structure dynamic adjustment on the basis of related theories and literature,along the "research on the relationship between media coverage and CEO turnovers——research on the relationship between CEO turnovers and capital structure dynamic adjustment — —conductive analysis of media coverage,executives change and capital structure dynamic adjustment" thread,revolves around the following seven chapters specific:Chapter One,introduction.Based on the reality background of the capital structure of listed companies in China and the CEOs' fixed position,this paper puts forward the research problems,expounds the research significance,research content,research method,research framework and innovation of this paper,and finally defines the relevant research concepts of this paper.Chapter Two,literature review.This chapter reviews the research results of media coverage,CEO turnover and dynamic adjustment of capital structure in academic circles at home and abroad,introduces the partial adjustment model of capital structure,and finds the appropriate entry point and theoretical support for the research of this paper by combing and summarizing the literature.Chapter Three,theoretical basis,historical evolution and analytical framework.This chapter introduces the theoretical basis of this article,including agency theory,media governance theory,managerial entrenchment theory,capital structure dynamic adjustment theory and upper echelon theory,then expounds the development course and the present characteristics of the financial media in China,analyzes the development course and existing problem of manager market in China,finally based on the analysis of the related theory,combined with China's reality background,constructs the media coverage,the change of the executive and dynamic adjustment of capital structure theory analysis framework,laid the foundation for the next step of research analysis.Chapter Four,an empirical research on media coverage and executive turnover.This chapter using the panel Logit regression test media coverage on CEO turnovers and executive performance relationship between the sensitivity of the change,and the media coverage on executive performance change relationship between the sensitivity of the differences in the different nature of the equity company by introducing a moderator variable analysis further tested negative media coverage and the negative influence susceptibility to executives change performance differences.Chapter Five,an empirical research on CEO turnover and the dynamic adjustment of capital structure.This chapter using dynamic panel data difference generalized moment estimation,calculate the speed of adjustment of listed companies' capital structure in China,empirically executive speed the influence law of change of capital structure optimization and adjustment,and the influence law on different equity property to the differences in the company,and further use of regulating variable analysis inspection executive speed change of capital structure optimization and adjustment by the succession of effect of senior age,financial experience,education background and source of succession characteristics influence.Chapter Six,the research on the transmission relationship between media coverage,CEO turnover and dynamic adjustment of capital structure.This chapter USES the mediating effect test to examine whether media coverage affects the dynamic adjustment of capital structure through CEO turnover and the differences of this transmission mechanism under different media coverage.Chapter Seven,research conclusion and future prospect.This chapter summarizes the main research conclusions of this paper,puts forward relevant policy Suggestions,and states the deficiencies in this paper and the possible future research directions.The main research conclusions of this paper include:(I)there is a significant negative correlation between the change of CEOs and the company's performance.Poor performance damages the interests of shareholders and is an important factor in the company's decision to dismiss CEOs.Media coverage is positively correlated with CEO turnover,as well as the performance sensitivity of CEO turnover.The higher the degree of media coverage is,the easier it is for listed companies to make the decision to change the company's CEOs,and the higher the possibility of the CEOs to change due to poor management.The effect of negative media coverage on the sensitivity of executives to change performance is stronger than that of non-negative media coverage.Moreover,the effect of media coverage on the sensitivity of executives to change performance was more pronounced in non-state-owned enterprises.(II)CEO turnover is positively correlated with the speed of capital structure adjustment.After the change of CEO in a listed company,the successor will actively take measures to improve the company's financing strategy and accelerate the pace of the adjustment of the company's capital structure to the optimal level,indicating that CEO turnover is a practical and effective corporate governance measure.After the CEO changes,the speed of the capital structure adjustment of the listed company is related to the financial experience and educational background of the successor,but not to the age of the successor.The positive relationship between CEO turnover and the speed of corporate capital structure adjustment varies according to the nature of corporate equity,but is not related to the source of succession.(III)there is a partial mediating effect between the media coverage and the speed of the company's capital structure adjustment.For listed companies with different equity nature,the mediating effect of executive turnover is different between media coverage and the speed of corporate capital structure adjustment.After further study found that distinguish the nature of the media coverage,negative media coverage by CEO turnovers affect the capital structure dynamic adjustment of conduction mechanism,and as the partial mediation effect,the media coverage to the negative and there was no significant correlation between the capital structure adjustment of speed,the negative media coverage by CEO turnovers affect the capital structure dynamic adjustment of the transmission mechanism does not exist.From a theoretical perspective,this paper verifies the effectiveness of media coverage as an external governance mechanism under the special situation of CEO turnover and enriches the research content of media governance theory by comparing the differences of companies with different degrees of media coverage in the decision-making of CEO turnover.Based on the logical framework of "media coverage affects the change of executives,and the change of executives affects the dynamic adjustment of capital structure",this paper studies the management's behavior of adjusting and optimizing the company's capital structure after the change of executives,and reveals from another perspective the important role of the governance method of CEO turnover in the process of the company's pursuit of value maximization.Based on the theory of dynamic adjustment of capital structure,this paper investigates the influence of the executive's decision-making behavior on the speed of adjustment of capital structure,which extends the research scope of capital structure theory from the perspective of dynamic adjustment.In terms of practical significance,this paper,based on the new development stage under the new normal of China's economy,analyzes and studies the dynamic adjustment of the company's capital structure,which is conducive to the listed companies to improve their capital structure and optimize the allocation of resources,and at the same time provides references and Suggestions for the implementation of the task of "three reductions,one reduction and one supplement" in the current economic development.Based on the current situation that the governance mechanism of listed companies is not mature and the management defense level of CEOs is high,the research on whether external governance mechanisms such as the media can make up for the defects of internal governance mechanism is helpful to optimize the governance structure,protect the shareholders' rights and interests,and improve the corporate value.By studying the influence of the characteristics of CEOs after CEOs' turnover on their business decisions,it is found that both the educational background and financial experience of CEOs have an impact on their behavior of capital structure adjustment,which provides a useful conclusion for companies to find suitable CEOs for their actual situations.