Research On The Influence Of Media Supervision On The Investment Efficiency Of Listed Companies

Corporate investment efficiency has always been the hot topic of company’s financial theories, and is one type of resource allocation behavior that affects a company’s future value. Current research in this area mainly focus on the measurement of investment efficiency and the related influential factors, such as company characteristic, corporate governance and external environment. There is not too much research on the relationship between media supervision and corporate investment efficiency. For our country’s capital market in transition, media is regarded as one of the important external supervising system, and is increasingly being valued. However, as an information dissemination intermediary, media has its own limitation. As it were, media’s effect to capital market has both sides. Media reports based on objective, impartial and real fact can help remove obstacles between investors and companies. It comes into being the public opinion pressure that makes public companies operate under certain regulation, and then help protect the investors. But there always exists some exaggerated, partial and false media reports that disturb the normal order in capital market. They bring troubles to company’s investment and financing activities and also investor’s benefit, blocking the healthy development of capital market.This article combines theory and empirical test to research if media supervision has effect on the public companies’ investment efficiency. Then we further check the differences effect when there is a difference of the property rights of the public companies, and propose some suggestions at last. We pick 5527 companies from 2009 to 2012 of A shares market making the empirical regression coefficient test. Here are the conclusions:(1) Media supervision cannot help improve a company’s investment efficiency. On the contrary, a company may have severer over-investment or under-investment more media reports. This shows that media in our country doesn’t perform the obligation as a external supervision system. Media reports cannot relieve companies’ external financing constraints and internal agency cost problem. The more media reports, the lower investment efficiency.(2) Under a different property rights, there is a different effect for a company’s over-investment and under-investment. In the state-owned group of samples, media reports may worsen a company’s over-investment and under-investment problem. In the non-state group of samples, media reports have not obvious effect on the investment efficiency.(3)When the actual controller of state-owned enterprise property is different, media supervision’s effects on the investment efficiency are also slightly different. It shows that the media may be partial for state-owned enterprises that controlled by state-owned assets management institution and the central government. So media supervision doesn’t help improve the investment efficiency, even it worsen the problem. But there are evidences show that media supervision have certain improvements on the state-owned enterprises that controlled by the local governments.For the above research conclusion, this paper argues that there shall start from two directions, the external environment and the media itself, to improve the positive role of media supervision in our country. Specific measures are as follows: First, reduce government intervention, and strengthen information disclosure. Government departments and industry regulators should reduce the inappropriate intervention of media action, and earnestly implement the responsibility of information disclosure at the same time, putting an end to the information rent-seeking phenomenon and improving the information disclosure system of listed companies. Second, Promote fair competition in the media, and perfect the legal protection system. Better and fair market competition environment among the media, plus valid media legal protection can better promote media’s watchdog role in the securities market. Third, From the perspective of media itself, build credibility and brand. Only high quality information report and skilled professional analysis can set up media’s brand and credibility, make the media itself fully gain initiative in the financial information market and more commercial interests, and at the same time benefit the healthy development of capital market.