Research On The Relationship Of Earning Quality And The Efficiency Of Capital Allocation-listed Companies Based On2006-2011Data

Capital allocation efficiency has always been the focus of economics and finance areas, higher capital allocation efficiency of listed companies can not only gain a strong advantages in the fierce market competition, it is also the key factor of capital market effective operation, and the capital market effective operation also depends on the accounting information quality, specifically the earnings quality. At present, scholars focused on the study of the connection of the accounting information quality and the cost of capital or the excessive investment, few scholars have straight study the connection of earnings quality and the efficiency of capital allocation. High earnings quality can reduce the information asymmetry between shareholders and future investors, managers, creditors, thereby inhibiting the inadequate investment and relieving excessive investment, then to achieve the efficient allocation of capital. Therefore in this article that the earnings quality has certain economic effect, it can improve efficiency of capital allocation.The research method of this paper synthesizes normative analysis, empirical test and analysis of quantitative and qualitative analysis. The article reasonably defines the quality of earnings and capital allocation efficiency concept and analyze the relationship between them at the same time, then generate the hypothesis of this article, using the Excel2003software, Eviews6.0software for data processing, through descriptive statistics and regression analysis and unit root test statistical method to test the hypothesis.The key contents of this thesis are as follows:firstly, the article elaborates the concept and the metering methods of earnings quality and the efficiency of capital allocation on the basis of previous research, at the same time reviews the related literatures and summarizes; then states the relevant theoretical basis, and the analyzes the intrinsic mechanism of earnings quality’s influence on the capital allocation efficiency, thus proposes the hypothesis; in the basis of theoretical analysis, this paper selects our shanghai and Shenzhen markets’2006-2011listed companies as research samples, study the connection of earnings quality and the efficiency of capital allocation, and the sample of efficiency of capital allocation is divided into underinvestment and overinvestment, discusses the earnings quality’s influence of the degree to both of them, then draw the following conclusions:(1) If the listed companies have a higher earning quality, the efficiency of capital allocation is higher too, namely the earnings quality and the efficiency of capital allocation have a positive correlation.(2) Earnings quality can alleviate the underinvestment and inhibit of overinvestment behavior, and relative to underinvestment, earnings quality force the overinvestment greater.Based on the above findings, this thesis composes three recommendations to enhance the earnings quality of listed companies:first is the increase of accounting standard, strengthen the execution of earnings quality is disclosed, followed by the improvement on the managers’supervision and incentive effect, the last is to strengthen the construction of external supervision system. This article hopes to be able to provide data support to improve the earnings quality of listed companies and capital allocation efficiency:also hope it can be used by the company management for listed companies’improving of earning quality and the efficiency of capital allocation and government regulators for providing the theoretical basis to the improving.