The Effect Of Ownership Structure On Real Activities Manipulation Of Chinese Listed Companies

Earnings management has become the focus of academic research and attracted the attention of the whole society, because of its extensive existence and far-reaching influence to stakeholders. The reason of earnings management's emergence and its important affecting factor is originated from corporate internal governance. Ownership structure is the foundation of corporate governance, including two meanings, ownership constitution and ownership concentration, so there is inseparable relationship between ownership structure and earnings management. The development of Chinese stock market has some defects in itself, and most of the listed companies'ownership structure exist an inadequate natural endowment, and all of these are able to increase companies' earnings management behavior. Therefore, the research on the effects of ownership structure on Chinese listed companies'earnings management extremely means a lot.Most studies on ownership structure and earnings management concentrated on the point of controlling accruals, and yet more arid more listed companies not only rely on accruals in reality, but also real activities manipulation, to decorate accounting information, mainly consisting of price discount or easing credit terms to realize sales manipulation; reducing discretionary expenditures such as selling, general and administrative expenses; overproduction to lowering the cost per unit. These methods are generally provided with strong elusiveness, leading to the problems of supervisors and auditors. So this paper chooses from the perspective of real activities manipulation, and discusses the effects of different ownership structure on Chinese listed companies'real activities manipulation, in the hope that it can increase the studies on earnings management from a new point of view, and also benefit to establish reasonable ownership structure and standardize the development of our country's stock market. In theory section, my paper mainly analyzes from three sides, earnings management, real activities manipulation and ownership structure, and that it speaks on and makes hypotheses the relationship between the two from five aspects of state shares, legal person shares, tradable shares, manager shares and the first majority shareholders. Positive analysis makes the whole of A-share listed companies in Shanghai and Shenzhen Stock Exchange as the object of study and chooses the related data from 2006 to 2008 as the basis of researching real activities manipulation, finally obtaining 1542 firms and their distribution by sector stocks in 2008. First of all, this paper selects suspect firm-years in accordance with earnings interval and analyzes descriptive statistics, proving that suspect firm-years usually show lower cash flow from operations and lower discretionary expenses but higher production costs. Secondly, it needs the models of Roychowdhury in 2006 to estimate the value of real activities manipulation variables, then makes use of linear regression analysis to bring to the following conclusions:suspect firm-years usually show lower cash flow from operation and lower discretionary expenses, and also have a trend to manipulate earnings upwards; it is easier to lead to real activities manipulation in large companies; state shares, legal person shares and manager shares have positive correlation with real activities manipulation; tradable shares have negative correlation with it; the first majority shareholders have U-shaped correlation with it. These conclusions powerfully certify the remarkable effects of the different ownership structure on Chinese listed companies'real activities manipulation.