An Empirical Study On Influence Of Ownership Structure On Earning Quality In Chinese Listed Company

The importance of earning quality has been noticed, while the definition and appraisal of earning quality has also been studied. But the research on what factors affect earning quality and how to improve it is few. Some regulation on preparing financial reports and disclosure were put forward, which can take temporary solution to some extent, but it is more important to find substantial factors that help company to develop healthily and improve earning quality.The basic reason is limitation of the structure of company's government, which restricts the improvement of earning quality. So the key point to improve earning quality is perfecting company's government of listed company. In fact, as the most important factor that determines the validity of company's government, ownership structure has close association with company's government. Modern company theory states that the supervision and positivity of client is different under different ownership structure. Having taking endogenesis of ownership structure and Chinese company's particularity, I investigate earning quality from the point of ownership structure.The author collected data of Chinese listed company in 2005 and divide the topic into two aspects that contain stockholder's concentration degree and stockholder's identity. Many Chinese scholars have discovered that Chinese stock market is still semi-strong or inefficient. Therefore, based on financial data, the author appraises earning quality and applies factor analysis to account for listed company, which is used as the data of earning quality in empirical study. The variables of ownership and earning quality are described firstly. Then the influence of ownership structure on earning quality is verified by partial correlation.The paper demonstrates that the first major stockholder's proportion and the earnings quality have plus relation. Non-controlling shareholder has clearly plus correlation with earning quality, while stockholder's concentration degree has clearly minus correlation with earnings quality. But the correlation between stockholder's identity and earning quality is not clear, which is decided by Chinese present situation.