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The Research Of Supervision Effect In Our Chinese Securities Market: Government Regulation And Media Effect

Posted on:2015-07-19Degree:DoctorType:Dissertation
Country:ChinaCandidate:Y Y LingFull Text:PDF
GTID:1109330422981397Subject:Financial engineering
Abstract/Summary:PDF Full Text Request
Stock market is the main areas of administrative intervention in the world. In this area,investors determine the value of securities and make decisions completely in accordance withthe information. Because this kind of accounting information has attribute of public goods, hepossibility of asymmetric information is bigger, which makes information disclosureregulation become a key part of government regulation. When the agencies around the worldstrengthen government control, a variety of illegal fraud scandals break out in domestic andforeign securities markets, such as U.S. Enron, WorldCom, and a series of cases of corporatefraud scandals in China, a large number of cases lead Information asymmetry, resourcemisallocation, and lead to dampen investors’ confidence, affect market efficiency. Theperformance of these market failures proved that in order to resolve chaos governmentregulation must be strengthened. Government regulation in our country’s capital market hasmarket reaction?When governments around the world take active regulation of the fraud and scandals,power of the media, which has an impact on corporate policy and on dealing with difficultcases, can not be ignored. On China’s capital market, by the end of2012,“public securitiesjournal” launched "2012top ten Black list of listed company", one of the five companies arepunished by CSRC media coverage. On July16,2012, XinDaDi has been included in theterminating lists by CRSC after one mouth of examination. It is the fourth company which hassucceeded the examination but questioned by the media. These cases illustrate that as theinformation bridge between listed companies and investors, media has played a very positiverole in exposing fraud. Researchers have investigated the role of the media separately indifferent national capital markets. But this article will combine media supervision withgovernment regulation and then explore the effects of media supervision on governmentregulation. This research not only expands the research field of government regulation butalso provides a new field of studying media. Through the analysis of theoretical andinstitutional background, this paper argues that: in light of the defects of the governmentregulation and restricting factors of media, two kinds of supervision can occur "blind Angle"independently, combine the two regulations each other will Improve regulatory efficiency.This article uses A-share listed companies as samples from2005-2012, the empiricalevidence confirms the theoretical inference. The main findings of this study are as follows:first, government regulation has a positive market reaction, the more negative media coveragebefore punishment announcement of CSRC, the greater the positive market reaction of punishment bulletins, that is to say, the media coverage promote the positive effect ofgovernment regulation in China’s market; second, the paper use ROA changes before andafter the year of violation to verify whether the companies make a change, the study findsthat ROA of the company a year after the violation is significantly higher than that ofprevious year, that means companies are under pressure to stop the violations, rectify andreform, improve the performance eventually. When the media reports negative news beforeCSRC, the changes of ROA of companies increase more obviously. This presents that in theface of the public pressure imposed by the media coverage, companies correct completely.Based on the above analysis this article concludes that: government regulation has efficiencyin China’s securities market, the role of media in China’s market can promote the efficiencyof government regulation. It also proves the necessity and effectiveness of combing thegovernment regulation with social supervision. In order to improve the market mechanism,enhance market transparency, maintain healthy and stable capital markets, Media supervisionby public opinion and the government supervision should combine and complement eachother.This article has important theoretical and practical significance to understand regulationpattern and maintain market healthy and stable development. First, this study will contributeto rich media research literature, this study of media is not constrained media itself, butcombine with the government intervention, by use of media information function andgovernance function, this study emphasizes that the two mechanisms coordinate and interactin the context of our reality. Second, because of the new research view, the conclusion is morein line with our current securities regulatory realities. As policy makers, in consideration ofimproving the efficiency of market regulation, they should give full attention to socialsupervision, strive to create the soil and atmosphere of media supervision, relax thegovernment control of the media from the system level. Finally, media itself should have hardskill to promote credibility, to give full play to the functions of media supervision, toeffectively promote the effect of government regulation, and maintain healthy and stablesecurities market.
Keywords/Search Tags:Government regulation, Media reaction, Stock Market
PDF Full Text Request
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