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The Effect Of Ownership Structure On Earnings Management Of Chinese Listed Co.

Posted on:2005-04-13Degree:MasterType:Thesis
Country:ChinaCandidate:L JiangFull Text:PDF
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The earnings management in Chinese listed companies is due to the flaw of corporate governance. All of those, the flaw of ownership structure is the main cause. The ownership structure is composed of ownership characteristics and ownership concentration degree. And the ownership structure is just a system about assigning the control power among the shareholders. Because the ownership characteristics affect the owner's behavior and the ownership concentration degree impact the owner's power, so that the ownership structure affect the earnings management. This paper firstly analyzes the main theories about earnings management. The Chinese listed companies use earnings management to financing, preventing unlisted and having little tax. The earnings management depends on the flaws of ownership structure. This paper analyzes that the ownership structure affect the earnings management in two sides, the one is the ownership concentration characteristics and the other is the ownership concentration degree. The most ownership structure of Chinese listed companies is dominant shareholder. Because in the companies controlled by state-owned shareholder, there isn't a real person burden the risk and the owners don't concern the company, so that the manager's behaviors are out of supervising. Earnings management is always resulted in. Another case is because the owner has a majority of companies' stock that he can do anything without supervising from other owners. Earnings management may be led too. Then, the paper presents an empirical study. The demonstration shows that if the ownership concentration degree is fine, there is fewer earnings management and if the institutional shareholder has the power to restrict the first-shareholder that the earnings management is fewer. Finally, the paper puts forward some advice for earnings management.
Keywords/Search Tags:listed companies, earnings management, ownership structure, ownership characteristics, ownership concentration degree
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