Earning Equality's Influence On Capital Allocation Efficiency

With the constant adjusting of economic structure,enterprises,as important micro subjects,play an increasingly vital role in economic development and capital allocation.Capital allocation efficiency has always been the focus in the field of economics and finance,while accounting information,especially earnings information,leads the flow of capital.Earnings information can alleviate information asymmetry and agency problems,in order to improve market efficiency and optimize capital allocation.In this paper,the A-share listed companies are taken as an example to explore the impact and mechanism between earnings quality and capital allocation efficiency,aiming to enrich the economic consequences of earning quality and make proposals and references of improving capital allocation efficiency.This thesis,firstly,defines the concept of earnings quality and capital allocation efficiency,and then induces and summarizes the relevant literatures.Secondly,based on the information asymmetry theory,principal-agent theory and earnings utility theory,this paper analyzes the mechanism of earnings quality on capital allocation efficiency,thus proposes the hypothesis.Thirdly,taking the 642 listed companies in Shanghai and Shenzhen markets as research samples,this paper collects the financial data from 2011 to 2015,analyzes them with SPSS software,as a result,the hypotheses are be empirically tested.Finally,the relationship between earnings quality and capital allocation efficiency is obtained,and suggestions are put forward to solve the existence problems.The results show that the earnings quality of listed companies is positively related to the efficiency of capital allocation.The high-quality earnings can relieve the enterprises' under-investment and inhibit the over-investment,leading to optimize the capital allocation.Meanwhile,compared with the companies which ultimately control right is owned by state,the earnings quality has a greater impact on the capital allocation of non-state-owned listed companies.