Research On Relationship Between Debt Financing And Earning Management

Capital is the important factor in the development of enterprise scale,and debt financing is the enterprise important source of funds;Research about surplus has been much attention of scholars both at home and abroad.The profit of the company will greatly affect the financing scale and effect.When it doesn't meet the conditions for debt financing,The enterprise for the investment of creditor,often manipulate the earnings information artificially.It means debt financing would prompt companies to adjust their surpluses in some way——earnings management.Debt financing may induce corporate earnings management behavior.But we can found that debt financing within the governance effect in the company,can reduce the earnings management behavior,and make the enterprise financial situation more healthy.Debt financing affects the earnings management of enterprise,and earnings management will react on debt financing.Invested to the company,creditors will be largely dependent on financial information disclosed.So the correlation between debt financing and earnings management for further study,it is very necessary.Paper first discusses the research status at home and abroad to comb the literature,and then based on the principal-agent theory,asymmetric information theory and the theory of debt contract theory and the analysis of debt financing and earnings management,select all a-share listed companies in 2008-2016 as the research object,using fixed effect model regression analysis,the empirical study of the correlation between debt financing and earnings management.Empirical results show:Debt financing has a dual impact on earnings management.When the company's debt level is low,the governance effect of debt financing dominates.When the company's debt level is high,the motive of earnings management is dominant.The debt financing scale and earnings management are U-type relationships.In terms of the term structure of debt financing,when the proportion of long-term debt financing increases,the listed company will significantly increase the profit.In terms of debt financing costs,it is not possible to reduce the financing cost of corporate debt by adjusting earnings management in the way of accrual earnings management,but increasing profits using real earnings management can truly reduce the cost of debt financing.It suggested that the creditors can identify the accrual earnings management behavior of enterprise,but can't timely identify the real earnings management behavior.Finally,according to the results of the empirical,the author puts forward some Suggestions to creditors,managers and regulators.