Research On The Relationship Between Check-and-balance Ownership Structure,Accounting Conservatism,and M&A Performance

The completion of the share-trading reform will convert a large number of nontradable shares of listed company managers into tradable shares,but it does not seem to fundamentally solve the problem of relative concentration of listed companies' equity.The centralized shareholding structure will give the majority shareholder too much rights,which will lead to the self-interested behavior of the shareholders,and thus increase the proxy conflict of the major shareholders to the small and medium-sized shareholders.This has become an urgent problem to be solved in the governance of listed companies in China.According to the principal-agent theory,one of the reasons for the agency problem is the equity advantage.Mergers and acquisitions have always been the inner highfrequency zone.It is not uncommon for large shareholders to use their absolute superiority in equity to conduct profit encroachment on small and medium-sized shareholders.Another reason is that the information is asymmetrical,the small and medium shareholders are separated from the management of the company,and the management and controlling shareholders have mastered most of the company's production and operation information,plus their absolute advantage in equity,they are self-interested by manipulating accounting information.a series of decisions.For example,on February 13,2019,the Securities and Futures Commission announced that the new day Hengli merger and acquisition of Boya stem cells is a typical use of information asymmetry to manipulate stock prices,to capture the interests of enterprises and small and medium shareholders.The shareholding structure of many major shareholders' checks and balances is considered to be an effective means of restricting the interests of major shareholders in the interests of minority shareholders in many foreign scientific studies.The balance of ownership structure can enable enterprises to effectively invest in the purpose of personal interests,and thus improve the performance of mergers and acquisitions.As a constraint mechanism for accounting information processing,accounting conservatism can effectively restrain the manipulation of accounting information by major shareholders,improve the quality of information disclosed by enterprises,gain market recognition,and reflect the performance of mergers and acquisitions.Of course,through equity checks and balances,it can also reduce the manipulation of relevant accounting information by the controlling shareholder on business management,investment,financing,etc.,prevent major shareholders from actively releasing �good news�,delay the release of �bad news�,and thus improve accounting to a certain extent.Robustness.But are different levels of equity checks and balances a different driver of M&A performance? Can equity balances affect the performance of mergers and acquisitions through accounting conservatism?Based on the principal-agent theory and internal control theory,this paper analyzes the impact of equity checks and balances on M&A performance and the mediating effect of accounting conservatism on equity checks and balances and M&A performance.This paper takes the M&A events of Shenzhen-Shanghai A-share listed companies in 2012-2015 as a sample(a total of 974 events)for regression analysis,and studies the performance of the two years after the merger,and verified the above two problems.The research shows that:(1)equity balance and short-term performance and long-term performance of M&A are positively related,indicating that equity checks and balances are one of the corporate governance methods to effectively improve M&A performance.(2)The impact of equity checks and balances on accounting conservatism is significantly positively correlated at the 1% level,indicating that when the equity checks and balances are high,other major shareholders will prevent the manipulation of accounting information by the largest shareholder,which can reduce information asymmetry.Improve accounting conservatism.(3)Accounting conservatism As part of the equity balance and long-term M&A performance,it is established that the equity balance can affect the company's decision-making on the one hand,and reduce the information asymmetry to a certain extent through accounting conservatism.Information quality,improve company M&A performance.However,accounting conservatism does not hold the intermediary role of equity checks and balances and short-term M&A performance.Through theoretical analysis and empirical research,it puts forward suggestions such as moderate concentration of equity,adjustment of shareholding structure,and improvement of internal corporate governance model.Of course,this paper still has certain limitations.Firstly,in the measurement of equity checks and balances,this paper only considers the checks and balances of other shareholders on major shareholders,and ignores the influence of the board of supervisors,trade unions,audit institutions and so on on the balance of stocks.Secondly,there is no distinction between the concerted action of major shareholders on the measurement of equity checks and balances.Finally,only the unilateral impact of equity checks and balances and accounting conservatism on M&A performance is considered,and the endogeneity issues are not considered.Finally,non-listed companies were not considered when selecting samples.