Social Networks,Media Reports And Major Shareholder Reductions

The reduction of shares,particularly the major shareholders' reduction,lingers in the China's capital market which can't be evaded and ignored.Generally speaking,both the market and law empower the major shareholders to reduce their holdings.The reduction is a type of selling and liquidity behavior which the major shareholders aim to realizing the value of their holdings in the capital market and is a way that market encourages the entrepreneurship.However,for the major shareholders' special social status,the reduction of their holdings not only attracts the public attention,but also tends to trigger disastrous shocks in the capital market.In a realistic point of view,major shareholders' reduction has always been brought huge impact on the capital market.Until now,it is still chilling to recall the 2015 stock market crash which caused by assorted reasons,and the major shareholders' reduction is a major contributory cause.Thus,the major shareholders' reduction has always been hot topics in the academic domain.And relative researches have never been stopped.With the application of Principal-agent Theory and Information Asymmetry Theory,Scholars from home and broad have got tremendous research achievements in the motives,timing,triggering conditions,constraints and influences of the major shareholders' reduction.One of the achievements is that the major shareholders' information advantage is the main motivation of the major Shareholders' reduction.However,most of these studies analyzing the behavior and motivation of major shareholders' reduction are in line with major shareholders' stand.As Granovetter(1985)pointed out,when studying man's behavior,especially man's economic behavior,both excessive and deficient socialization should be avoided.Researchers should pay more attention to man's realistic situation in society.The major shareholders,as a special group in the economic society,are a sort of unique group.Within this unique group,various socialized connections make the major shareholders form a social network with network features to influence the major shareholders' economic behavior.This thesis focuses on the major shareholder group,with the application of social network analysis,examining and viewing the impact that major shareholders with network features exert on major shareholders' reduction behavior.As an information dissemination tool,Media and media reports would have much impact on listed company's valuation.Especially in the new media and internet era,the impact and effects of media becomes more obvious.Namely,the media are increasingly changing the behavior of the listed companies and investors with its influence.In recent years,more and more studies have been done on the relationship between media,media reports and capital market,which fully illustrates that media,as an important environmental factor,have done a lot to various economic phenomena in capital market.First,what were the driving factors behind the mass reduction of major shareholders like in 2015?Second,how does the social network composed of major shareholders affects and influences the behavior of major shareholders' reduction?Third,what role does media reports play in the reduction of major shareholders?Focusing on the three aspects above,combing and summarizing the existing literature,the thesis takes the information transmission of capital market as the research perspective.In the guidance of this perspective,the thesis thinks that in terms of the phenomenon of large shareholders' reduction,the capital market is an information system composed of major shareholders,other investors(including small and medium investors and institutional investors)and regulators.In such a system,the media act as an important channel which transmit information in various ways.The thesis argues that "information decoding" is a pretty significant part of information utilization in the process of information dissemination.Different communities would have different decoding cognition even for the identical information.Therefore,when analyzing the behavior of major shareholders' reduction,people should consider not only the social factors of the major shareholders,such as the influence of social network of major shareholders,but also the role and influence of media reports.When facing with issues of reduction,even the major shareholders who have the information advantages need to make prudent decisions.According to the analysis of social network,the group that forms the network must have common understanding of things.For the similar preference of major shareholders,they have the identical information decoding consensus on the issue of reduction under the influence of social network group consciousness of major shareholders.The similarity makes the large shareholders' reduction behavior consistent.In 2015,under the influence of the social network of major shareholders and amid criticism and blame,the major shareholders still choose to reduce their holdings,which brought heavy losses to the capital market that hardly recover until today.On account of the reality of our country,the thesis draws on the measurement method of social network to set up the social network and its relative index of major shareholders from three dimensions which are the position power,social interaction and reputation accumulation.The results show that the social network index,which represents the comprehensive influence of the social network of major shareholders,has conspicuous impacts on the major shareholders reduction behavior.And the banking relationship,association relationship,market relationship,education relationship and social reputation which formed the social network of the major shareholders play different roles and have different influences on major shareholders' reduction behavior,ratio and quantity.As for the media reports,the previous studies claim that the media play a major role in public opinion supervision.However,the thesis believes that the media reports,no matter positive or negative,cannot determine the actual propaganda effect,which was up to how the users of media information interpret and use the information.The empirical study of the thesis indicates that negative media reports in China's capital market cannot get the expected restraint effect on the reduction of major shareholders.Making further research on this topic,it is found that the social network of major shareholders has an impact on the role of media reports.Even under the negative media reporting environment,the social network of major shareholders still has a supporting effect on the reduction of major shareholders.It fully explains that the major shareholders have a special interpretation and usage of media reports on the basis of their own social network relationship.In view of the importance of major shareholders' reduction in the governance of capital market,the thesis proposes governance measures and suggestions from four aspects which are system design,supervision authorities,major shareholder supervision and media governance,the capital market sustained and healthy development of the capital market.