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

Research on domestic and international stock market found that the prevalence of earnings management. Earnings management to some extent reduce s the earnings information quality, making it difficult for markets participants make investment decisions. Ownership structure is an important factor of earnings management. Family culture has a prominent manifestation in the ownership structure, such as the performance of the high concentration of ownership, "dominance" and other issues. These problems make earnings management issues among family holding listed companies more prominent.Therefore, research on influence of the ownership structure of family holding listed companies on earnings management has necessity.Using theoretical analysis and empirical analysis combined approach, we study the effects of the ownership structure of family holding listed companies on earnings management this paper. In the theoretical analysis of this theory, the definition of family business, ownership structure and earnings management are defined at first. And then we compared family holding listed companies with other types of listed companies. Subsequently, theoretical analysis has been made to analyze the process and mechanism of the impact which the ownership structure of family holding listed companies has on earnings management. Based on the theoretical analysis,we proposed hypotheses for empirical research about ownership structure’s influence on earnings management and selected our sample and got access to data thus to summarize variables for empirical analysis.Empirical research in this paper established the regression model between ownership structure of family holding listed companies and earnings management. With earnings management as explained variable, equity structure related indicators as explanatory variables, came to the conclusion of empirical research. The empirical results show that the increasing of stake of the major shareholder will increase family holding listed companies’ earnings management, because they positively correlated. The ratio of the second to the tenth largest shareholders are able to restrain earnings management effect. In the composition of equity, managerial ownership are negatively correlated to earnings management, while the proportion of institutional ownership and the proportion of outstanding shares did not significantly affect earnings management. Finally, based on the conclusions of the empirical analysis, we put forward a sound of completing family holding listed companies’ ownership structure, regulating internal governance of family holding listed companies and promoting the development of securities market in order to play the role of market regulation.