The Reduction Process Of Non-tradable Shares In Empirical Studies Of Earnings Management

Equity division reform, non-tradable shares of listed companies as major shareholders are small predatory non-market means investors. Separated Equity Structure makes the market mechanism constraints executives and major shareholders and other aspects of behavior difficult to play a role. With the free transfer of non-tradable shares and the smooth flow of the original non-tradable shareholders and the market to achieve relevance means more direct. Improved market conditions, low holding costs and reduction process may take some of the association strategy, which is considered to promote the beneficial shareholders of the Ministry of reduction conditions. As a result of institutional factors have control over the use of the original non-tradable shares information with the advantage of the search for control over the rent, giving rise to capital market-based listed company earnings management motivation. Reduction in the process of how to strengthen the supervision and information disclosure regulation transactions to protect the interests of small shareholders, maintaining stable development of the securities market, constitute the most important future market regulation. This article is in under such a background of non-tradable shares in the original holdings of earnings management during the study, revealed reduction of non-tradable shares in the surplus before management of its behavior, as is pushing stock prices under control The right to rent. Reduction of non-tradable shares non-tradable shares can be financed given the opportunity to control as shareholders in the company's share price performed better choice when the sale of stock holdings to maximize gains. Overall market prices will affect the company's financial information, stock performance, in line with reduction of needs, listed companies may guide investors through various information channels to judge the value, which includes a reduction on the annual earnings for the previous Positive control. According to the above analysis with the reduction of a hypothesis need .○1 the original non-tradable shares may be in the reduction of the financial year prior to the recent positive data, earnings management;○2 the extent of earnings management of listed companies stock prices are associated with the reduction. Based on the needs of this election in Shanghai in 2007 -2009 reduction of non-tradable shares of 99 listed companies and 99 companies in 2004 -2005 and 2006 -2008 years of earnings management, stock prices were compared , assuming that the process of validating the use of law as a measure of accruals earnings management variables, the basic model to estimate the size of Jones non-reduction of earnings management; and the establishment of the corresponding explanatory variables on the capital market listed company earnings management motivation The model, which is whether the price reduction and the reduction of the stock earnings management in prior years to test the correlation; through the reduction of annual earnings before and after comparing the degree of control and test whether the reduction of pre-existence of earnings management , after the assumption is verified, and the phenomenon of the moment is proposed to be listed companies in China to fulfill fiduciary responsibilities.