Informal Information Transmission Mechanism And Corporate Value

Information is a fundamental factor in trading and pricing in capital markets.With the development of information technology,the information media present a trend of diversification.Newspapers,magazines,televisions,phones,internet,search engines,mobile devices and We-media have all become effective information media.The rapid development of mobile internet has made We-media the most convenient,the lowest cost and the most influential dissemination method in current society.It has profoundly changed the quantity,type,and dissemination method of information.Reducing information asymmetry is the main way to improve the efficiency of capital markets.Information transmission mechanisms between listed companies and investors can be divided into two types,formal and informal.The formal mechanism includes the information disclosure designated by the capital market regulators,such as the websites of exchanges,the websites and newspapers designated by the CSRC,and the official media selected by the company to deliver non-mandatory disclosure information,such as being interviewed by the official media,registering an official Micro Blog,etc.While informal information transmission mechanism refers to information transmission methods other than the above ones,such as personal Micro Blog and “DOUYIN” account of entrepreneurs on We-media platform.As the important decision-makers and helmsmen of enterprises,entrepreneurs will transmit their personal words and deeds to the entire companies,which will have a profound impact.With the development of information technology,will the entrepreneurs effectively use social media as an informal information transmission mechanism to deliver information? How will this information affect the companies? Unlike information disclosure at the enterprise level,informal information transmission at the individual level is a new perspective.Based on the above background,this dissertation explores the economic consequences and motivations of informal information transmission mechanism.Specifically,all A-share listed companies from 2010 to 2017 are selected as the research objects,and entrepreneurial Micro Blog data were used to measure informal information transmission mechanism.The companies’ characteristic indicators are acquired from CSMAR database,and entrepreneurial Micro Blog data are obtained by Python crawling.And the remaining missing data are supplemented by manual collection.The dissertation focuses on four issues: First,does informal information transmission mechanism affect enterprise value? Second,what information is conveyed by the informal information transmission mechanism? Third,how does the informal information transmission mechanism affect enterprise value? Fourth,what types of enterprises are more inclined to conduct informal information transmission?Aiming at these four problems,the theoretical models are constructed and tested empirically.The main conclusions reached are as follows:Firstly,informal information transmission mechanism is conducive to enhancing enterprise value.Based on controlling enterprise characteristic variables and entrepreneurial characteristic variables,it is found that the release of entrepreneurial Micro Blog is beneficial to the improvement of enterprise value.It can contribute to not only the increase of operational cash flow,but also enterprises risk reduction.Moreover,if the entrepreneurial Micro Blogs are divided into “Disclosure Micro Blog”and “Personalized Micro Blog” according to whether they are related to company information,it is found that the more Personalized Micro Blogs are,the more conducive they are to promote enterprise value.If according to whether entrepreneurial social capital transmits and based on the proportion of Micro Blogs containing @,the results show that the higher proportion of Micro Blogs including @,the more obvious increase in enterprise value.If based on the emotional tendency of Micro Blogs’ contents,which are divided into positive emotional intonation and negative emotional intonation,it is found that the higher proportion of positive emotional intonation,the more noticeable increase in enterprise value.All the results above alleviate the endogenous problems through robustness tests.It shows that as the informal information transmission mechanism,entrepreneurial Micro Blog plays an important role and have an impact on enterprise value.Secondly,the impacts of informal information transmission mechanism are discussed from the perspective of financing.The corporate financing is divided into debt financing and equity financing.Based on the explanatory variables of the entrepreneurial Micro Blogs,it is found that publishing Micro Blog is helpful to reduce the cost of equity financing,but has no significant impact on debt financing cost.This is basically consistent with the conclusions of existing media exposure literature.The results of cross-sectional analyses show that under the circumstance of uneven market development in China,the negative correlation between entrepreneurial Micro Blog and the cost of equity financing is more significant in the regions with low marketization process.This suggests that the informal information transmission mechanism may be a response to the imbalance of market development level,and provides a new way to solve the financing difficulties of SMEs.Meanwhile,it is found that in the case of weak external information environment,entrepreneurial Micro Blog plays a more important role in reducing equity financing cost.All the results above alleviate the endogenous problems through robustness tests.It shows that the informal information transmission mechanism is an important supplement in the absence of the formal mechanism.Thirdly,motivations of informal information transmission mechanism are also included.Based on the framework of information transmission theories and the control of the enterprise characteristic variables and entrepreneurial characteristic variables,it is found that the higher degree of enterprise information asymmetry,the more entrepreneurs tend to publish Micro Blogs.The entrepreneurial Micro Blog serves as an important organizational role.Following this logic,high-tech enterprises have strong technical and information barriers,as well as high degree of information asymmetry,which take a lot of proprietary knowledge from transmission or result in high transmission cost.Yet,entrepreneurial Micro Blog is conducive to building trust and identity,so as to effectively achieve the goals that corporate formal information disclosure cannot achieve.Empirical test results also prove that entrepreneurs in high-tech enterprises are more inclined to publish Micro Blogs.The above results show that the relationship between entrepreneurial individual behaviors and corporate organizations is inseparable and in a community of interests.Lastly,in order to rule out alternative interpretations and endogenous issues,this dissertation focus on verifying the information transmission,and excluding an alternative explanations(entrepreneurial overconfidence).Through diverse research designs,the robustness of the conclusions of this dissertation is guaranteed.Specifically,during the verification of information transmission path,it is found that the entrepreneurial Micro Blog is inseparable from the formal information disclosure of the enterprise based on the interactive effect of formal information disclosure and informal information transmission.At the same time as the formal information disclosure,the amount of information by entrepreneurial Micro Blogs has also increased.Besides,empirical test result also shows that the entrepreneurial Micro Blog contributes to alleviate the value impairment caused by information asymmetry.Another conclusion is concerning with the impacts of entrepreneurial personal characteristics.By measuring the index of entrepreneurs’ overconfidence,it is found that the proportion of managers with over-confidence is less than 50% in the sample of entrepreneurial Micro Blogs’ owners.And the correlation coefficient between Micro Blog posting and overconfidence does not exceed 0.2.The results of regression model also indicate no statistically significant effects;thereby,overconfidence hypothesis can be excluded.Hence,the conclusion concerning information transmission path is very robust.In summary,informal information transmission mechanism is an effective one.Entrepreneurial Micro Blog is not just a simple personal behavior;it also bears important organizational purposes.The dissertation contributes to both the theoretical and practical perspectives.In terms of theoretical contributions,the dissertation shifts the information disclosure from enterprise level to a more specific individual level,innovatively distinguished the information transmission mechanisms into formal and informal types,which enriches the research scope of existing information transmission theories from the perspective of new media.Moreover,the dissertation takes entrepreneurial Micro Blog as a pointcut to study the entrepreneurs’ behaviors,enriches existing relevant literature,and uses social media as a new measurement method to provide new ideas for managers in the context of Internet and big data.Finally,based on the theories of information transmission,the dissertation illustrates the relationship between entrepreneurial individual behaviors and organizational performance.It is suggested that enterprises can use the informal information mechanism to transmit information when they are in the absence of formal mechanism.As for the practical significance,the research conclusions of this dissertation can provide important empirical references for entrepreneurs’ behavior decision.With the rapid development of information technology,vital changes have taken place in the internal and external information environment of enterprises,and the ways people transmit and collect information have also changed.Social media such as Micro Blog has become the main media for communication in contemporary society.This change in the external environment has also prompted companies to rethink the ways and means of information disclosure.The research provides critical guidance for entrepreneurs to use social media for information transmission.Furthermore,the direction of regulatory information disclosure by authorities has been expanded as well.The use of new media and new technologies has prompted the regulators to continuously revise and improve the existing regulations so that strong policy support for the new information disclosure can be provided.