Intermediary Effect Of Earnings Management On Interlocking Directors And Corporate Value

After the reform and opening up,China's economic market has changed dramatically,the enterprise's management mode and technical level have also been developed greatly,at the same time,technical and personnel competition between enterprises is intensified.As an emerging economy such as our country,it is difficult for any enterprise to be able to do it alone.In such ansituation,a strategy based on a interlocking relationship is an important way to develop for all kinds of enterprises.It can be said that various enterprises have high-speed growth in the future economic market,the establishment of interlocking directors will become the strategic choice in more and more enterprises.Does such aninterlocking director have a positive impact on the their own operation management and internal governance?From a point of view,if interlocking directors can promote the flow and effective allocation of information and resources between enterprises,then could they play regulatory functions better and inhibit corporate earnings management behavior?From another point of view,if interlocking directors can strengthen communication and reduce the transaction costs between enterprises,so how do they impact the enterprise value?Based on the considerations above,this paper took empirical research on all A-share listed companies of Shanghai Stock Exchange in the past four years from 2012 to 2015,and attempted to introduce the theory of intermediary effect,trying to place interlocking directors,earnings management and corporate value in achain,to verify whether earnings management will play a mediating role betweeninterlocking directors and corporate value.After empirical research,it was concluded that a company with interlocking directors may increase the corporate value by reducing the level of earnings management.The more interlocking directors owned by company,the higher possibility was,that was to say,the intermediary effect was valid.In addition,this paper also put forward some appropriate countermeasures and suggestions for the future development of interlocking directors ofChinese listed companies according to the analysis results,in order to improve the internal management and governance efficiency of listed companies in our country.