| The launches of GEM and small and medium-sized board provide more entrepreneurial companies financing services. And it for the domestic venture capital also provides a good exit channel. More and more venture capitals choose to assist small and medium-sized enterprises, to get more profit. The venture capitals in initial IPO process may play a role of certification and supervision, restrain the earnings management behavior, and then for their own interests have an "agitation effect" which increases the degree of earnings management of listed companies. So it is necessary for China’s current venture capitals1to research the influence of the degree of earnings management.With the sample of quarterly data of662small and medium-sized enterprise board and GEM companies in Shenzhen Securities Market during the period between the2010.1and2012.12Using the modified Jones model to measure the level of IPO earnings management, and using the multiple regression and controlling the rest variable, the effects of venture capital(measured by VC ownership) on the earnings management in IPO four stages are analyzed.Based on the four stages of pre-IPO, IPO, lockup and post-lockup, the earnings management dynamic effect of venture capital of GEM and small and medium-sized listed companies exist. Through the empirical analysis on the GEM and the small and medium-sized board market, Results show that the listed companies of small and medium-sized board and GEM have positive earnings management. The venture capitals play a certain inhibition role in IPO earnings management, but do not essentially change the earnings management dynamic effect; In different stages of the IPO. earnings management’s motivation and effects are constantly changing. In the two stages of IPO and Pre-IPO the Venture capitals tend to improve siginificantly a positive earnings management, and in two stages of Lockup and Post-lockup the tendency to earnings management are reversed siginificantly. The conclusions are robust. |
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