Research On Earnings Management And Its Impact On Corporate Performance In Private Placement

The private placement as the capital market of our country on the rise of new equity financing,due to the advantages of its less constraints,low threshold,simple approval procedures,has gradually become the mainstream way of the listed companies equity refinancing.In our country,the listed company ownership structure has the characteristics of "a dominant".Therefore,the private placement is actually a kind of equity refinancing behavior which is controlled by the major shareholders of the company.It is possible to facilitate the major shareholders to transport interests.It is with the starting point of earnings management behavior of listed companies in the process of private placement,the paper researches the existence,motivation,means,methods and their impact on company performance of the earnings management in the process of private placement in listed companies.The results of the study will provide theoretical and empirical basis to improve supervision for the securities regulatory departments,to perfect the laws and regulations of private placement,to regulate the governance mechanism of listed companies and to make investment decisions for the outsider investors.The paper selects the successful implementation of the private placement of listed companies in the A stock market in 2011-2012 as study sample to studies the earnings management behavior in the process of private placement.First of all,the average degree of earnings management of listed companies is tested by T statistics,and the existence and motivation of earnings management in the process of private placement of listed companies are preliminarily verified;Then,the paper selects the same industry companies with the total assets close to the previous year of the private placement of sample company as the control samples,and the T statistical test of The difference of the degree of earnings management between the sample firms and the control sample further verify the existence and motivation of earnings management in the process of private placement of listed companies;Finally,this paper empirically tests the impact of earnings management before the private placement on the performance of listed companies.The results show that: in the process of private placement of the listed companies in china,there is a behavior of earnings management,and the listed companies adopt accruals and real activities to manipulate corporate earnings;Further research confirms that the listed companies have the motivation of earnings management in the process of private placement.The higher the company’s accounting earnings,the higher the company’s share price,so when the object types of private equity placements is institutional investors,in order to raise more funds,the listed company has the motivation to improve company’s earnings.When the object of private equity placements is major shareholder and their and related parties,in order to obtain more shares with the same assets,the listed company has the motivation of negative earnings management.The result of the study of the economic consequences of earnings management shows that different methods of earnings management have different effects on the performance of listed companies: the accruals earnings management has a significant effect on the company’s short-term performance;the real activity earnings management not only has a significant impact on the company’s short-term performance,but also affects the company’s long-term performance.The study of the paper enriches the research of private placement in china,and provides theoretical support for the improving of the relevant laws and regulations of private placement of listed companies.