The Influence Of Accounting Conservatism On Corporate Investment Behavior

As an important characteristic of accounting information quality, accountingconservatism has always been regarded as a hot spot in scholars research. By reviewingresearch literature at home and abroad, we found that scholars research about accountingconservatism mainly focuses on its existence, the cause of its existence, its change trendand its impact factors. And scholars began to research its economic consequences,especially in investment field just only in recent two years. Whether the company’sinvestment behavior is reasonable or efficient, not only directly relates to whether theinterests of shareholders can be protected, but also has a relationship to the company’sability to achieve its maximum value. In this thesis, we study the accountingconservatism’s influence on the investment behavior of listed companies in our country,hoping to provide a new path to control irrational investment behavior and add some newempirical evidence to economic consequences of accounting conservatism in investmentfield.Based on the study of domestic and abroad scholars, according to the theory ofprinciple-agent and information asymmetry, this thesis selects three years’ data of listedcompanies in Shenzhen and Shanghai Stock Exchanges from2009to2011as simples. Thisthesis judges the rationality of investment behavior in listed companies at first, then takesaccumulated three years of negative non-operating accruals as a measure of accountingconservatism, and inspects the influence of accounting conservatism on over-investmentand under-investment respectively. In addition, combined with the special institutionalbackground in our country, over-investment and under-investment sample firms aredivided into state-owned shares of listed companies and non state-owned shares of listedcompanies in order to verify whether the nature of the biggest shareholder would affect therole of accounting conservatism or not. The empirical results show:(1) Accountingconservatism can significantly inhibit over-investment behavior of listed companies;(2)Accounting conservatism would result in the occurrence of under-investment behavior;(3)State-owned nature will weaken the accounting conservatism’s inhibitory effect onover-investment, but also can alleviate the accounting conservatism’s negative effect onunder-investment. At last, based on summarizing the research conclusions and the actualconditions of our country, this thesis puts forward relevant policy suggestions from the point of stakeholders, government, supervision authorities and companies respectively, andpoints out the research direction in the future combined with the deficiencies of this article.