E3S Web Conf.
Volume 235, 20212020 International Conference on New Energy Technology and Industrial Development (NETID 2020)
|Number of page(s)||5|
|Section||Analysis on the Development of Intelligent Supply Chain and Internet Digital Industrialization|
|Published online||03 February 2021|
Effectiveness of performance compensation commitment under Information Inequality
Beijing Jiaotong University
The demand of information society promotes the production of performance compensation commitment, which is used to alleviate the information asymmetry between investors and listed companies. The generation of performance compensation commitments has reduced valuation difficulties and other problems to a certain extent, lowered M&A costs and improved M&A efficiency. However, as the sample size increases, its drawbacks have gradually emerged. Youbo Pharmaceutical has stepped on the line for three consecutive years to achieve accurate performance. After the commitment period expires, the performance has dropped by more than 50%, so the authenticity of its performance has been questioned. Through the analysis of its announcement and various indicators, I find that the performance compensation commitment can not bring good market reaction after the commitment period, nor can it improve the integration effect, and even there are some behaviors such as premium, goodwill impairment risk and earnings management.
© The Authors, published by EDP Sciences, 2021
This is an Open Access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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