Summary:
M&A plays an important role in the process of promoting high-quality development. However, due to the imperfection of internal and external governance, the M&A market is full of chaos. This phenomenon hinders the potential path of optimizing resource allocation efficiency through M&A to achieve high-quality development. In the A-share market, performance compensation commitment is originally an important way to protect investors' interests. However, a large number of performance commitments are not completed with high quality, and there may be manipulation (such as precise compliance), which reduces the efficiency of the market. This article identifies the performance commitment manipulation with empirical research methods and explores the way to improve the performance commitment fulfillment quality.By manually collecting the completion of performance commitment agreements signed by A-share listed companies in China from 2008 to 2021, the study finds that performance commitment manipulation is widespread, and media monitoring could significantly suppress performance commitment manipulation. In terms of the motivation of performance commitment manipulation is stronger, the opportunity is larger, and the originality of media coverage is lower, the governance effect of media monitoring is weaker, and vice versa. According to the mechanism analysis, media monitoring mainly plays the role through three channels: increasing investors' attention, audit supervision input, and regulatory pressure. The conclusions indicate that the market needs to notice the performance commitment manipulation and utilize the governance role of the media to improve the quality of performance completion and protect the interests of small and medium-sized investors. Therefore, this study proposes the following policy recommendations: First, the conclusions confirm the important role of the media in improving the performance of M&A. The media should be fully utilized as an external governance force to maintain the order of the capital market. Second, media has the characteristics of wide coverage and low cost. External information users could obtain valuable information to save information collection costs and reduce information asymmetry, which helps curb management opportunism. Third, the influence of the media on decision-making is limited by certain conditions.This suggests that in the process of media commercialization reform, the media should consider conducting in-depth reporting through private information collection and analysis to provide high-quality incremental information for the market and improve information transparency. At the same time, listed companies should improve information disclosure to enhance investors' access to information and reduce their excessive dependence on information intermediaries. This paper makes several contributions to the literature: First, “precise compliance” in the performance commitment has been mentioned in some literature, but there is no clear definition and concrete evidence for the performance commitment manipulation. This article proposes the conception and provides direct empirical evidence based on whether the completion ratio jumps at the breakpoint, confirming that there is significant performance commitment manipulation in the agreement. Second, few studies have discussed how to suppress performance commitment manipulation, especially when both parties have information advantages and the possibility of collusion. External governance forces are particularly important. This article examines the governance effect of media monitoring on performance commitment manipulation. Unlike previous studies that focus on the impact of the media on investment decisions in the M&A (such as during the negotiation process or before the completion), this article discusses the performance commitment period in a certain period after the completion to test the long-term economic consequences of media supervision on performance commitment manipulation and provides an important supplement to existing literature. Third, this article has certain practical implications for regulating and improving the quality of the M&A. Financial media plays a positive role in curbing performance commitment manipulation and improving the quality of the M&A. In the future, securities regulatory authorities should pay attention to the monitoring and governance function of this important information intermediary, which will help save information collection costs and improve the efficiency of the regulation.
徐亚飞, 孟庆玺. 并购业绩承诺完成质量何以提升？——来自媒体监督的证据[J]. 金融研究, 2024, 528(6): 188-206.
XU Yafei, MENG Qingxi. How Could the Quality of Completion of M&A Performance Commitment Be Improved ——Evidence from Media Monitoring. Journal of Financial Research, 2024, 528(6): 188-206.
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