The Study On The Debt Finance And Earnings Management Of Chinese Public Companies

With the development and maturity of Chinese capital market, the enterprise earningsmanagement are increasingly attracted extensive attention of theory and practice, the law ofearnings management in enterprise tend to be detailed discussed increasingly. For Chineselisted companies, on the one hand, the debt capital markets provided financial growthopportunities for the listed company based on its enhanced liquidity. On the other hand, italso constrained the earnings management behavior of enterprise. However, the existingresearch on the analysis of the earnings management and debt financing relatively scattered,and the matured quantitative measurement of earnings management is also lacked, which arefailed to provide the effective guidance for enterprise earnings management behavior.Therefore, this paper will focus on the relationship between the debt financing and earningsmanagement in debt capital markets, explore the effective measuring implement of debtfinancing and earnings management, and study how different debt financing impact on theearnings management behavior by large sample data studies.Around the research subject of relationship study between debt financing and earningsmanagement of listed companies in China, this paper is divided into five parts. The firstchapter is introduction, mainly explains the significance of study on the relationship betweenthe debt financing and earnings management, the current research status and the researchmethod and technical route this research will use. The chapter2is the literature review, whichinclude the review about the theory of earnings management, the related research reviewabout debt financing and debt governance, and the existing research review about therelationship between earnings management and debt financing, which all will be the researchfoundation for the further empirical research. The third chapter is earnings managementresearch and analysis for our country listed company, which constructed the econometricmodel based on the existing qualitative research on earnings management, formed theanalysis paradigm of the degree of earnings management of listed companies. The fourthchapter studied the debt financing of listed companies, analyzed and the structure of debtfinancing of listed companies and different industry by large sample data of listed companiesin China, which is necessary to study the effect of debt financing on corporate earnings management. The fifth chapter studied the relationship between debt financing and earningsmanagement of listed companies in China by empirical research directly, through the researchdesign process about variable and research hypothesis proposing, the sample selection anddata collection, then obtained the empirical results to further validation of the theoreticalhypothesis.The result shows that the debt contract and debt financing expectation of listedcompanies are associated with the degree of earnings management, debt financing ratio waspositively correlated with earnings management degree, debt financing expectation and waspositively associated with the degree of earnings management of debt financing. At the sametime under the background of the perfect corporate governance structure, the listed company’slong-term debt ratio is negatively related to the degree of earnings management, short-termdebt ratio is positively associated with the degree of earnings management. Researchconclusion analyzed the function rule of debt financing on the earnings management underthe capital market, which will enriching the earnings management theory as well as providingreference and guidance for the enterprise financial management practices.