The Effect Of Venture Capital Syndicate On Listed Companies' Earnings Management

Due to its many advantages such as resource complementation, revenue sharing and risk sharing, venture capital syndication has become major force to promote venture capital industry's growing and technical innovation. However, the venture capital syndication unites venture capitalists with different background, different values, different interest demands. Precisely because of such differences, the cooperation between venture capital syndicators always falls into dilemma because of the conflict between individual interests and interests of the other members or investment itself, which results in the decrease of the efficiency of syndication. Facing the current situation of choosing syndicate, we can effectively inhibit the opportunism and reduce the problem of earnings management.In this paper, by using the enterprise which venture capital investor syndicate in China from 2010 to 2014 at the gem and the small and medium-sized plate as the research object, investigating the types of lead-investor and Heterogeneity among venture capital syndication partners influence on earnings management of listed companies, the empirical results show that by dividing lead-investor into stable and transactional investor, stable lead-investor play the role of the external supervisors, lead-investor significantly inhibits the company's earnings management behavior. Second, venture capital syndication partner have differences in investment background, resources, professional skills, investment ideas, interest demands etc, on the one hand, complementary cooperation between partners can strengthen group to supervise and manage the enterprise, on the other hand, with the increase of the degree of heterogeneity can lead to internal conflicts of interest and reduce the enthusiasm of supervision, the empirical research results show that the heterogeneity among syndication partners have U-shaped relationship with the company's earnings management. Finally, by compared with company A and B between heterogeneity among syndication partners and earnings management to support the empirical evidence.