The Motivations Of Earnings Management Research On Stockholders’ Pledge Of Stock Right Of Private-owned Listed Companies

China’s private listing Corporation, the relative concentration of equity, the majority of the controlling shareholders have control of the listing Corporation absolutely. It is because of the large shareholders have relatively large shares in the listing Corporation and the holding position, so in recent years more and more pledge behavior attention by society mostly occurs in the large body of shareholders of listing Corporation. Unlike other general real pledge, the stock right witch as pledged goods, influenced by the operating status and external environment factors of listing Corporation, become unstable. Therefore, on the one hand, the loan amount which obtain through equity pledge is related to Target Corp’s value of the stock. On the other hand, in order to control for the risk arising from the fluctuation of stock price, the pledger will according to the market value of shares and pledge loan principal ratio set warning line and square position line. When the market value of shares and pledge of principal of the loan ratio dropped to the warning line, The financing party need to add the deposit or the number of the pledge of stock. When it fell to open line, the pledgee will have the right to sell the underlying stock, and enjoy priority in compensation. Company earnings is one aspect of the impact of stock value. Therefore,research on large shareholders’ equity pledge would trigger a listing Corporation’s earnings management behavior is of great theoretical and practical significance.Research method of this article combines the normal analysis and empirical analysis.Firstly, we summarize the related research at home and abroad. Secondly, we analyzed the mechanism of shareholder equity pledge the basic theory, the basic theory of earnings management and the relationship between the two. According to the theory of the foundation of the above analysis to propose the hypothesis. Then use the method of empirical study, using the listing Corporation’s date from 2009-2013, which listed in Shanghai and Shenzhen as the initial research sample, to study the relationship between shareholders equity pledge and earnings management in private listing Corporation. The results of the study show that, the previous year and those year when the behavior of equity pledge occurred, private listing Corporation equity pledge sample accrual earnings management and real earnings management level is significantly higher than the non equity pledge sample. The more the number of pledged equity listing Corporation held by large shareholders shares, the higher the level of the accrual earnings management and real earnings management. In the equity pledge announcement that year, listing Corporationtend to use real earnings management but not accrual earnings management. The above research results indicate that the relevant departments should improve the equity pledge behavior and information disclosure risk control management system, constraints on shareholder equity pledge behavior, strengthen the legal construction, strengthen the equity pledge loans.