Research On The Impact Of Chain Director Network On The Quality Of Performance Forecasting

In the post-pandemic era,China deals simultaneously with slower economic growth,difficult structural adjustments and the impacts of previous economic stimulus measures.With great emphasis on the sound development of the capital market,the CPC Central Committee is striving to standardize,transparentize and vitalize the capital market.As an important financial report,performance forecast can alleviate internal and external information asymmetry and protect the interests of minority shareholders.Hence,it is of great importance to guide enterprises to disclose high-quality performance forecast.The characteristics of the board of directors as the supervisory layer must affect performance forecast disclosure quality.The financial fraud of Kangmei Pharmaceutical in 2018 caused a sensation throughout the capital market,and made people rethink whether directors had made a difference.The State Council issued "Opinions on the Reform of the Independent Director System of Listed Companies" in2023,which further standardized the director tenure system.And the increasingly extensive interlocking director network in China also has an impact on corporate governance as an informal factor.Does the interlocking director network affect performance forecast disclosure,and what is its mechanism? The questions remain to be answered.The influence of the interlocking director network on performance forecast quality and its mechanism were explored in this thesis from the perspective of the informal social network.Literature review was conducted mainly in terms of the interlocking director network and performance forecast quality.Then the analysis was made based on the resource dependence theory,social capital theory,class cohesion theory and busy director theory with some hypotheses presented.With A-share listed companies between 2010 and 2019 as the research samples,a model was constructed for an empirical investigation on the relationship between the interlocking director network and performance forecast quality as well as on their influencing mechanism.The property of the enterprises,namely state-owned or not,their internal control level and the auditor type were taken as variables for the heterogeneity test,while explained or explanatory variable replacement and the one-phase lag of explanatory variables were taken as instrumental variables for the robustness test.Then conclusions are mainly drawn as follows: First,the centrality of the interlocking director network and the richness of structural holes have a negative impact on the accuracy of corporate performance forecast,which means excessive network embedding.Second,the agency cost partially replaces the intermediary,that is,the advantageous location of the interlocking director network exacerbates the agency problem,leading to a decline in the corporate performance forecast quality.Third,the impact of the interlocking director network location on corporate performance forecast quality is heterogeneous,and especially significant in state-owned enterprises but little in other companies.Meanwhile,an effective internal control system can restrain the hazards from the excessive embedding of the interlocking director network.