The Influence Of Media Supervision And Government Intervention On Agency Costs

The separation of ownership and management rights leads to the emergence of agency problems, which is a heavy burden of listed corporation and seriously restricts the healthy development of listed corporation and the sustainable development of China’s economy. Domestic and foreign scholars have made many researches on how to reduce agency costs and improve agency efficiency, but the research literature on the effect of external governance mechanism on agency costs is relatively few. Under the special system in China, because of the government in the pursuit of social benefits and government officials to seek personal gains, the government intervention has become a common phenomenon in the listed corporation. And it is particularly serious for the state-owned holding of state-owned enterprises. In addition, as the information bridge between the company and the public, with the increasing demand for information of listed corporation, media pay more and more attention to the listed corporation. Therefore, this article based on two external mechanism of corporate governance, the media supervision and the government intervention, in order to provide new empirical evidence for reduce agency cost.In this paper, we take 311 listed corporation as the research sample in 2013, propose research hypothesis based on the existing literature review and theoretical analysis, empirically test the influence of media supervision and government intervention on agency costs from the perspective of external corporate governance mechanism and to further investigate the influence brought by the difference of every area of our country the degree of government intervention on the governance role of the media. The research results show that: (1) The more negative media coverage of the media, the lower the agency cost. (2)Although there is no significant correlation between the government intervention and the agency costs of the listed corporation, the government intervention can significantly improve the agency costs of the state-owned listed Corporation. (3)In different areas of government intervention, the impact of the media on the agency costs of the listed corporation is also different.In the higher government intervention areas, media supervision will significantly reduce the company’s agency costs, the government intervention in the lower areas, media supervision will reduce the company’s agency costs, but it does not have a significant impact. According to the research results, this paper believes that reducing the government intervention and strengthening the media supervision is conducive to reduce the agency costs and improve the protection of small investors. Finally, based on the results of this paper, we put forward some suggestions on how to reduce agency costs and improve agency efficiency.