Research On Earnings Management In Private Placement Of Manufacturing Listed Companies In China

Research on private placement and earnings management has always been a hot topic in academia.The related researches on targeted private placements in china are mostly directed at the stock price effect,discounts,interest transfer,and other aspects of targeted private placements.There are relatively few research literatures on earnings management in private placements,and research on accrued earnings management remains more focused.There are few studies on whether two kinds of earnings management methods are used simultaneously in private placements.There are currently two different academic views on the impact of institutional investors on earnings management.One view is that institutional investors have information and capital advantages,which can form an effective power of equity checks and balances,and curb the company's earnings management;another view believed that institutional investors are affected by the principal-agent relationship and their own interests,which reduces the role of actively participating in corporate governance and inhibiting corporate earnings management behavior.Whether there is any surplus management behavior in China's manufacturing listed companies prior to the private placement,whether the possible earnings management behavior can hold institutional investors' ability to hold stocks,and the suppression of earnings management under the condition that the institutional stocks are subject to different private placement targets.What's the difference? This is the focus of this study.The main work of this paper is as follows:Firstly,the background,significance,content and method of the study,the research path and possible innovations are described.Secondly,combing and summarizing the concept of related literature from the aspects of private placement,earnings management,motivation,means and institutional investors.Then the directional increase of listed companies in the manufacturing industry is analyzed.The scale and characteristics of the private placement of A-share listed companies and manufacturing listed companies during 2007-2017 were aggregated and analyzed,which laid a foundation for the following empirical analysis.Then,through theoretical analysis,the research hypothesis and research design of this paper are put forward.Taking the A-share manufacturing listed companies with private placement from 2013 to 2016 as research samples,the modified Jones model and Roychowdhurry model are used to measure accrued earnings management and real activity respectively.The extent of earnings management,then examines the existence of earnings management during private placements.By constructing an empirical model,we examine the inhibitory effect of pre-IPO institutional investors' equity holdings on earnings management in private placement and the effect of different private placements on earnings management.The theoretical and empirical research results show that:(1)Prior to the private placement of listed manufacturing companies,there are indeed accruals and real activity earnings management behaviors,and the time series distribution of earnings accruals and real activity earnings management from the two years before the issuance to the issuance of the actual activities.It can be seen that the level of earnings management is the largest in the year before the increase.(2)Institutional investors' shareholdings have an inhibitory effect on the earnings management before the private equity of listed manufacturing companies and can reduce the level of earnings management.(3)When the additional issuance of new shares is targeted at large shareholders and their related parties,there is a significant negative correlation between institutional investors and earnings management,that is,institutional investors can suppress earnings management behavior.When the issuance target is institutional investors,although the regression coefficient is negative,it is not significant.