Internal Control Defect Information Disclosure And Total Factor Productivity Of Firms

High-quality development is not only the unavoidable choice of China’s socialist market economy,but also the indispensable choice for achieving the great rejuvenation of the Chinese nation.As an imperceptible operating lever to guarantee the healthy and orderly operation of this highly complicated machine,internal control can unquestionably reflect the financial information quality,business reputation and other indicators of the enterprises.Therefore,external stakeholders usually include the disclosure of internal control information in the decision-making reference,and the exposure of internal control shortcomings is the main content of the disclosure of internal control information.It is also an intimate channel for internal and external shareholders and borrowers to directly obtain internal control weakness information.In this case,whether the disclosure behaviour of corporate enterprises will have an impact on total factor productivity is a question that deserves further investigation.This thesis takes A-share listed entities from 2008 to 2020 as sampling to validate the effectiveness of internal control in practice defect information disclosure on total factor productivity and its channel mechanism.It is found that disclosure of internal control defect information significantly inhibits total factor productivity by intensifying financing constraints,and this is still the outcome after a number of robustability studies.Further investigation indicated that the inhibition effect had certain heterogeneity,which was only valid when major defect information was disclosed and selective disclosure was made.Hence,companies should pay attention to the quality of the process of internal control to strengthen the system’s overall effectiveness,enhance the effectiveness of internal control and improve the flaw disclosure system,take the own initiative to honestly disclose their own faults rather than cover up and evade;Regulatory departments should also enhance the internal control disclosures system after the inspection and punishment mechanism.This thesis can provide clues and enlightenment for the micro market subjects to better understand the information disclosure system and corresponding resolutions,as well as offering reference points for the relevant government ministries in order to implement and optimise the policy.The original contributions of this thesis are as outlined below: First,this study contributes to the body of research on the interrelation among internal control and total factor productivity from the disclosure viewpoint.In the domestic and the overseas existing studies,regarding the association between the internal control and the total factor productivity,most of them focus on the quality of internal control,while ignoring that The exposure of internal control weaknesses information itself may have a particular impact on the total factor productivity of the enterprises.From the vantage point of publishing information about internal control failings,this report also provides a contribution to research on the interplay between internal control and total factor productivity,which is one of the novelty of this thesis.Second,the examination of the relationship between internal control deficiency information publicity and total factor productivity is introduced into the financing constraint as an intermediary mechanism,and the role of public disclosure of internal control weakness on the total factor productivity of enterprises is systematically and comprehensively discussed,which has certain practical significance for enterprises,internal and external investors and creditors to rationally view internal control and defect disclosure.Thirdly,based on The article goes on to explore the impact of the disclosure of internal control weakening information on total factor productivity,and further considers the impact of the selective disclosure of internal control deformations information in the more dynamic process and the introduction of public disclosure of material information on internal control failures,so as to further lay a theoretical foundation for corporations to improve the information disclosure system and relevant agencies to formulate targeted regulations and policies.