Research On The Difference In Damage Of Different Kinds Of Negative Events On The Value Of The Company

With the strengthening of regulatory risk control systems,the rise of internal controldisclosure system of listed companies,as well as the increasing importance of corporate social responsibility,external enterprise information quality has become increasingly important.However,in recent years,as South Korea Samsung involved in the political turmoil,Germany's Volkswagen Exhaust exceeded the standard,the United States Enron and World Com financial fraud and other negative events continue to expose,which has a great impact on the confidence of investors.In China,more and more listed companies have been blamed by the People's Courts,the China Securities Regulatory Commission or other regulatory agencies for certain misconduct,and have even been subject to various types of penalties.These include making financial misrepresentations,bribing government officials,misappropriating company assets,evading and selling shoddy products.The occurrence of negative events has caused the company to fall into a series negative news,resulting in many negative effects——including limited business development,loss of opportunities to sign new contracts,reduced future expected cash flow,stock price fluctuations,etc.,ultimately affecting the value of company through various channels,and directly affect the healthy development of the capital market.In the current academic research,there are few research results on the company's negative events.How to restrict the occurrence of negative events in the company,deal with the exposure of negative events,and resolve the impact of negative events in the company have also become issues that listed companies urgently need to solve.Based on the above background,this paper selects 918 Chinese A-share listed companies which have been punished by people's courts and securities regulatory agencies in the period of 2006-2015 as the sample by manually collecting data,and divides negative events into political negative events,market negative events,product negative events and mixed negative events.The company's value is divided into short-term market value,long-term market value and financial value.Examining the damage difference and influence cycle of different types of negative events on company's value by using the event research method and OLS regression,and using the mediation effect model to explore the path between the two mechanisms.The results of the study indicate that:(1)Whether political negative events,market negative events,product negative events or mixed negative events all have a negative impacton the company's short-term market value,long-term market value and financial value.In general,negative events have a negative impact on the value of the company.(2)Compared to market negative events,political negative events,product negative events and mixed negative events will cause serious damage to the company's market value and financial value,that is,political negative events,product negative events and mixed negative events have serious negative impact on the value of company.(3)Compared to market negative events,political negative events,product negative events and mixed negative events will bring a longer influence period.The market needs to digest and absorb negative news for a longer time.(4)After negative events,in the capital market,it led to a decrease in company's financing scale which reduced the company's value.In the product market,it led to a decrease in market share and thus harmed the company's value.That is,the financing scale and market share are some positive mediating effects between negative events and the value of company.