Empirical Research On The Impact Of Ownership Structure On Earnings Management In Chinese Listed Companies

The earnings information of listed companies is an important reference forinvestors to make investment decisions, but the prevalence of earning managementbehavior in listed companies will reduce the quality of earnings information andinfringe the interests of stakeholders, so it is not conducive to the healthy and orderlydevelopment of capital markets. The past studies at home and abroad had shown thatcorporate governance will have an impact on earning management, while the ownershipstructure is the core of corporate governance. So this thesis is trying to prove what kindof impact the ownership structure has on earning management through empiricalresearch. This thesis has provided certain reference for related research in theory, somesuggestions and opinions in decision-making for stakeholders and the formulation ofpolicies and regulations in practice.On the basis of the theoretical research of scholars, the article used a normativeresearch method to analyze the impact of three different aspects of ownership structureon earning management in theory, including the ownership concentration, theshareholding structure and the equity liquidity. After the remove, this thesis selected1118listed companies in Main Board of the Shenzhen Stock Exchange and theShanghai Stock Exchange in2007-2010as the study sample, and used the empiricalmethod to research the impact of ownership structure on earning management.In empirical research, this thesis tested the validity of the Jones model, themodified Jones model and the extended Jones model, and then selected the modifiedJones model which was proved to have the highest validity to calculate the discretionaryaccruals which was used to measure earning management as explanatory variables;Then this thesis selected proportion of the largest shareholders shares, the shareholdingratio of the largest shareholder and the second largest shareholder shares, the top fiveshareholders shares proportion of square and shareholders holding pattern as theexplanatory variable to stand for the ownership concentration; Then selected the natureof the controlling shareholder, the proportion of state-owned shares, the proportion oflegal person shares, the proportion of the management shares and institutional investorsshares to stand for shareholding structure as the explanatory variables; Then selected theproportion of outstanding shares to stand for equity liquidity as explanatory variables;Finally this thesis built a regression equation to test the impact of ownership structureon earning management. The regression results shows: the top five shareholders sharesproportion of square and earning management has a significant positive correlation; Thelevel of earning management in the listed companies controlled by single shareholder is significantly higher than other listed companies; The level of earning management instate-owned listed companies is significantly higher than that of other listed companies;The proportion of state-owned shares and earnings management has a significantpositive correlation; The proportion of managerial ownership and earnings managementhas a significant negative correlation; The impact of the proportion of state-ownedshares on earnings management is greater than the proportion of managerial ownership;The proportion of outstanding shares and earnings management has a significantnegative correlation; The proportion of the largest shareholders, the shareholding ratioof the largest shareholder and the second-largest shareholder, the proportion ofcorporate shares and ownership of institutional investors did not have significantlyaffect on earning management. On the basis of the analysis of empirical results, thethesis suggests that the decision-making of investor should be more comprehensive andrational, and suggests the regulatory agencies to strengthen the review of the accountinginformation of listed companies controlled by a single shareholder, and suggests that thegovernment should further promotes reform and supervision of the state-ownedenterprises, and encourage enterprises to implement equity incentive for corporatemanagement.