Political Connection,Media Attention And Violations Of Listed Companies

The expansion of the scale of China's securities market has increased the survival pressure of a large number of enterprises,resulting in more and more enterprises to maximize profits by forging and disclosing false information and other irregularities.This kind of violation infringes the rights and interests of investors,brings negative impact on the credit image of China's securities market,and also restricts the healthy development of China's capital market.In recent years,China's Securities Regulatory Commission has gradually tightened its supervision of corporate irregularities,and administrative penalties have been increasing.Liu Shiyu,then chairman of the Securities Regulatory Commission,proposed to strengthen the fight against corporate irregularities,especially to deal seriously with institutions and individuals with adverse impacts.Zhu Jiandi,executive director of CPC Association and Secretary of CPC Committee of Lixin Accounting Firm,put forward that violations of regulations frequently occur in listed companies,and the cost of violations is low.It is suggested that enterprises and individuals who violate regulations should be investigated for criminal responsibility and the strength of legal punishment should be strengthened.At the same time,the Shenzhen Stock Exchange promotes the fundamental institutional reform of capital market,such as major illegal compulsory delisting and suspension of reorganization of listed companies.Therefore,exploring the factors affecting corporate irregularities and restraining corporate irregularities can not only provide a long-term healthy investment environment for small and medium-sized investors,but also respond to the state's strict regulatory policy to a certain extent,which has important practical significance.In our country,the influence of external factors on corporate irregularities can not be underestimated.Emphasizing human relations has been a traditional idea for thousands of years in China.It is common for corporate executives to serve in government agencies at the same time.At present,the domestic economy is in a transitional period,and the relevant system is not perfect enough.Political connection may bring many resources and benefits to enterprises.So,will there be any enterprises to find loopholes in laws and regulations with the help of the political connections of senior executives,and increase their company's tendency to violate the rules? At the same time,with the advent of the information age,the effectiveness of external supervision of the media began to play a role gradually.Once the violations of listed companies are exposed by the media,it will greatly affect the reputation and stock price of the company.Then,will the media attention to enterprises reduce the probability of violations of the company? Compared with the executives without political affiliation,the executives with political affiliation pay more attention to their reputation and social image.Under the supervision of the media,the cost of discovering violations is higher,because the criticism of public opinion will not only affect the positive image of enterprises,but also greatly hinder the development of their own career.Then,media attention will restrain the violation of corporate rules by political affiliation.Does it have a positive effect? In view of the above questions,Through taking the existing research papers for reference,the research approaches has been extended in this dissertation.And this paper attempted to research the relevant influence of these factors on the violation of regulations of listed companies from the perspective of political connection and media attention,in order to provide evidence support for standardizing the behavior of listed companies in China and promoting the healthy development of market economy in China.All the A-share listed companies from 2012 to 2017 which based on Shanghai Stock Exchange and Shenzhen Stock Exchange has been taken as research samples,this paper uses logit model of controlling industry and year to study the influence mechanism of political connection factors on listed companies' irregularities.Secondly,the affections of media spotlight on those companies,which has irregularities,have been discussed in the paper.Based on the emotional tendencies recognition,media attention content has been divided as positive and negative in the research.Through that method,exploring whether the impact of positive and negative media reports on listed companies' violations is different could be achieved.Finally,it explores the interaction effect of political connections and media attention on listed companies' violations.The results show that the tendency of violation will increase significantly in politically related enterprises;media attention is negatively correlated with the violation of listed companies,and higher media attention can effectively suppress the violation of corporate rules,in which positive media reports play a better role in external governance than negative media reports;media attention significantly suppresses the violation of listed companies by political connections.Positive effects of regulatory actions.This paper broadens and extends the existing research perspectives of listed companies' violations in China,fills in the relevant theories of listed companies' violations to a certain extent,and provides evidence support for standardizing the behavior of Listed Companies in China and promoting the healthy development of market economy in China.It is hoped that through the empirical study on the effects of media attention and political connection on listed companies' violations,this paper will give some inspiration to China's capital market external supervision in the period of economic transformation,promote capital market to respond positively to the policy call of strict supervision and administrative punishment,and provide a reference for enriching and improving the supervision means and methods of supervision departments.Policy recommendations provide shareholders and investors with a more transparent and healthy capital market,and also provide a new research perspective and research ideas for future related types of research.