The Impact Of Stratified Institution On Earnings Management Behaviors Of Listed Companies In The New OTC Market

The question of earnings management of listed companies in capital market has always been an important field for domestic and foreign accounting scholars.Theoretical and empirical studies showthat firms will implement earnings management based on different motivations,and the motivation intensity depends on the target value.Under different economic environment or institutional background,and with the dynamic changes of institutional environment,the enterprise's target value or economic interests will also change.Thus,in order to maximize the interest or minimize the loss,enterprise will adjust the information of the financial income positively or negatively in the report with the changes of institutional environment at any time.The new OTC market is entering a period of rapid expansion of the scale and the institutional construction.Since it expanded to the entire country,the number of listed companies increases sharply because of the more relaxed access system,far more than that in the main board market.At the same time,the differentiated characteristics among the listed companies are increasingly obvious.In order to meet the differentiated financing needs of different enterprises,and alleviate the regulatory pressure of regulators and reduce the decision-relevant cost of investors effectively,the National Equities Exchange and Quotations introduced stratified institution in the new OTC market,which divided the listed companies into two levels,innovation layer and base layer.The introduction of the stratified institution makes the listed companies facing a significant change in the institutional environment,which will further affect earnings management behaviors of enterprises in the micro-level.At the same time,the institution has different effects on the economic or target value of listed companies in innovation layer and base layer,and this situation will lead to a significant difference in the motivation between the two levels of companies.This paper attempts to study the behavioral characteristics of listed companies before and after the introduction of the stratified institution from the perspective of earnings management.The empirical results show that the listed companies have overt earnings management behaviors,and after the introduction of the institution,the degree of earnings management is significantly higher than before;meanwhile,companies in the innovation level has a higher degree of earnings management than that in the base level.