Research On Enterprises' Performance Manipulation And Banks' Creditor Protection

The capital of Chinese enterprises primarily comes from banking system at present time.It is a common phenomenon for credit defrauding by means of fraudulent financial statements. There are so many literatures which studied companies' performance manipulation behavior at the view of equity financing,but lack of systematic and comprehensive research at the view of creditor protection.It is very important to study the relationship between companies' performance manipulation and creditor protection and puts forward some recommendations to reduce credit risk at the time of deepen reforming for Chinese banks as well as spreading of global financial crisis.Through the review of related literature,this thesis finds its entry point and location that is from the perspective of commercial banks' business to study the influence of enterprises' performance manipulation behavior to bank's resources allocation.This thesis firstly studies companies' performance manipulation behavior for the motive of debt financing.It respectively uses distribution test and multivariate regress analysis to differentiate the debt financing motive of performance manipulation from other motives and achieves the evidences for Chinese listed companies manipulating their earning and cash flow to exceed thresholds in order to get funds from banks.At the same time,it finds that private enterprises make more earnings management for debt financing than state-owned companies do.After obtained the evidences of company to manipulate their profit and cash flow for debt financing,this thesis goes further to investigate whether bank can discern companies' defrauding behaviors and how bank to cope with these behaviors.The result of this thesis is that Chinese banks can not discern companies' manipulating behaviors as a whole.This thesis also tries to disentangle the aspiration and the technique for Chinese banks to discern companies' manipulating behaviors and check them separately.By selecting the companies with little profit or little cash flow which are easily identified as fraud to control the technique for Chinese banks to discern companies' manipulating behaviors,this thesis finds that Chinese banks only suspect these companies at a certain extent and grant them more stringent debt maturity than others.It is difficult to test whether performance manipulation affects resource allocation.The thesis also studies this problem creatively.There is more than one motive for enterprises' performance manipulation,and they are not certainly direct cause for the default of bank loan. As a result,there is not enough evidence to take loan default rate as the dependent variable and performance manipulation level as the independent variable to make multivariate regress analysis.It is also not appropriate to make univariate comparisons to testify higher performance manipulation level with higher loan default rate because lots of experienced papers found that there was significant and positive relevant relationship between performance manipulation level and profitability.The descriptive statistics of this thesis also shows that the relevance between loan default rate and performance manipulation level is almost not significant.The thesis selects these companies which are obviously with performance manipulating suspects as study samples again.By comparing the loan default rates of these special companies with that of adjacent interval companies,the thesis find that the loan default rates of these suspected companies does not have significant differences with that of left adjacent interval companies but significant larger than that of right adjacent interval companies.It manifests that Chinese banks can not effectively discern companies' manipulating behaviors,and this situation brings negative economic consequences to banks.In addition,the thesis finds that the loan default rates of private enterprises is higher than that of state-owned enterprises,and the loan default rates in high market-oriented area is lower than that of low market-oriented area.Finally,the policy suggestions of the thesis are that must reduce the cost of Chinese banks to collect information and improve their aspiration and technique for evaluation the qulity of companies' accounting information.