Research On Real Earnings Management Behavior Under The Influence Of Dual Class Structure

In China's capital market,the dual class structure,which was welcomed as early as 1920's in America,has not been allowed yet,but is increasingly getting recognition in the capital market around the whole world.As China's internet giants including Baidu and Jingdong to IPO in America because of constraints by domestic legal system,and as the most famous foreign internet companies like Facebook and Google came to chose dual share structure,this structure is now gradually drawing the attention of Chinese scholars.The emergence,popularization and development of dual-class share structure went through a procedures full of twists and turns under mixed comments due to its advantage and disadvantage.The advantage lies in it helps the manager to maintain control and refrain from control acquisition and dilution while the accessing to capital markets to raise funds,so as to allow the managers to implement long-term strategy to the company.The drawbacks rest with the operator could violate the interests of public investors and abuse control for private gain in the situation of decreased M&A pressure under broken supervision of the board.These issues may lead to harmful subject of agency between the shareholders with and without right of control,also to earnings management.This study starts with relation between real earnings management and dual-class share structure,and also statements about their concepts and related theory,and then carries out the theoretical analysis and empirical test based on financial data samples of several listed companies adopting dual-class share structure which came in to market in 2012-2015.After the study of separation phenomenon of cash flow and control rights of companies adopting dual-class share structure and its influence upon real earnings management,and the comparisons to companies adopting same share same right,here comes conclusion:1.Compared with companies adopting same share same right,management of listed companies adopting dual-class share structure possess higher voting ratio witch increases real earnings management in directly proportional.2.Compared with companies adopting same share same right,the higher the proportion of cash flow rights of managers of listed companies adopting dual-class share structure,the slider real earnings management degree.3.The higher the deviate degree of voting ratio and the proportion of cash flow rights ratio of managers of listed companies adopting dual-class share structure,the fiercer the real earnings management degree.Of all above,in the listed companies adopting dual-class share structure,real earnings management phenomenon occurs obviously.