Research On Earning Management Influence Of Institutional Investors

With the foundation of National Equities Exchange and Quotations, the New Third Board has become one of the most important financing platform for the high-tech middle and small-sized enterprises. Because of the high-risk of the New Third Board, the institutional investors are the most important participants. The quality of the disclosed information can affect the function of the capital market. As the index of the quality, the study of the earning management is becoming important. Under the shareholding of institutional investors, the study of the influence of the earning management in the New Third Board can provide some suggestions to the development of the New Third Board.Combining the theoretical study and empirical study, this paper conducts a research on the influence of the institutional investors to the earning management in the New Third Board. Review the existing research on the earning management and the institutional investors. Describe the agency theory, the corporate government theory, the theory of the check balance. Propose the hypothesizes on the influence of the shareholding of the institutional investors, the shareholding ratio, the numbers of the institutional investors, the financing action by issuing stocks to the earning management. Based on the result of the regression analysis, here comes four conclusions: in the New Third Board, the shareholding of the institutional investors encourages the earning management, the shareholding ratio has negative influence to the NM, the number of the institutional investors has positive influence on the NM, the financing action by issuing stock encourage the NM. The innovational part of this paper is the timeless of the research on the NM with the fast development of the Third Board. The result can provide some suggestion s to the policies makers of the Third Board.