A Study On Incentives And Performance Of Forward-looking Information Disclosure In MD&A Basedon Game Theory Perspective

Information asymmetry is the fundamental problem that hinders the improvement of economic efficiency,and the market noise caused by it makes the investment deviate from the optimal investment level.It is no doubt that financial information disclosure has the function of reducing information asymmetry,and it also can help investors make the right value judgments and allocate resources reasonably to prevent the inefficient investment.However,the scope of information demander is expanding gradually,and the risks of industry even macroeconomic are increasing day by day,which make traditional financial information difficult to meet the needs of investors to predict the performance and screening value.Forward-looking information in management discussion and analysis(MD&A)is an important platform for companies to provide predictive information,which extends the time dimension of traditional financial information and helps to further mitigate information asymmetry,so it attracts more and more attention.However,under the background of China's emerging market,the legal system of information disclosure is not perfect.What's more,the punishment mechanism is lagging behind.In addition,MD&A forward-looking information is difficult to be verified timely.As a result,the disclosure is in a dilemma.It not only hinders the MD&A forward-looking information to play a full role in capital market but also reduces the efficiency of resource allocation and deteriorates to the vital interests of investors.Taking into account the state-owned property rights in China and the tide of state-owned reform,this paper takes listed state-owned companies from 2012 to 2014 in Shanghai stock exchange as samples.First of all,this paper analyzes the influence of investors and competitors from information disclosure incentives prospective,which utilizes the game theory.And then examines the governance effect of MD&A forward-looking information on the investment efficiency of state-owned enterprises from the angle of financing constraints and principal-agent.Based on the theoretical analysis,the paper constructs a scoring system and draws the MD&A forward-looking information disclosure index to test the impact of institutional investors and industry competition on it.Then,the investment efficiency is selected as the performance index to test the governance effect of MD&A forward-looking.It shows that MD&A forward-looking information disclosure is a result of motive-driven game with investors and competitors.Institutional investor shareholding promotes MD&A forward-looking information disclosure level,and industry competition led to a decrease.In terms of performance,it improves investment efficiency by mitigating underinvestment,but does little to restrain overinvestment.The information disclosure system has been improved in recent years,combined with the deepening of marketization and improvement of investors' right-protection awareness and professional quality,making MD&A forward-looking information disclosure paly a role in investment efficiency.However,there is inherent risks in the MD&A forward-looking information,and the structure of corporate governance and legal supervision system has not yet fully matured,resulting in serious opportunistic incentive and low disclosure quality.Especially for state-owned enterprises,it has more intense incentive to disclosure exaggerated and low-quality forward-looking information to attract funds to investment.At this point,investors are misled by false information to make a biased decision,although it can ease the under-investment is also easy to encourage over-investment behavior.In summary,although the regulatory system introduced by the current policy to improve the MD&A forward-looking information disclosure has helped,but there is still long way to go for how to play its governance effect adequately.Based on the conclusion mentioned above,the study puts forward suggestions on how to improve the level of MD&A forward-looking.And then raise ideas about how to exertthe governance effect of MD&A forward-looking information disclosure on investment efficiency of state-owned enterprises.In line with the increasing demand for forward-looking information,this paper not only enriches the study of MD&A forward-looking information disclosure,but also helps to understand the problems of the disclosure in a more thorough way,so as to provide the reference for related departments to seek the corresponding information disclosure principles.Looking at the background of the progressive development of the market and the reform of state-owned enterprises,this paper also broadens the research of MD&A forward-looking information disclosure's economic consequences,and explores its relationship with underinvestment and overinvestment,which validates the effectiveness of the current information disclosure system.In addition,based on investment efficiency perspective,it comes up with advice to how to give full play to governance effect ofMD&Aforward-looking information disclosure.