Research On The Impact Of Private Placement On Earnings Management Of Listed Companies In China

Private placement is the way of financing using by joint-stock company,which is operated in certain term,applies to specific rules and issues shares privately to specific group.Because of its low threshold and high financing efficiency,it has become the preferred refinancing method for listed companies.However,the private placement has also increased the direct entry threshold of investors due to the limited number of issuers.Because of its specific model,the problems between the characteristics of the major shareholders and small and medium-sized shareholder always come up in this area.Earnings management is one of the means to achieve the interests of large shareholders.Scholars have proved that there are earnings management before and after the issuance of private placement,also before the release.The objects of issuance,the proportion of major shareholders also influence the level and method of earnings management.This article explains the reason of the benefit transmission in the private placement from the aspects of "principal-agent theory" and "information asymmetry theory".Base on these theories,this paper studies the effect of private placement on corporate earnings management in 2008-2015,which is based on the implementation of the A-share listed companies in China.The Roychowdhury model and the modified Jones model are used to estimate the accrual earnings management and real earnings management and construct a different-in-different model(DID)to validate the research hypothesis.The study found that:1.On the year that private placement is implementing,enterprises will significantly improve the level of accrued earnings management.2.On the year that private placement is implementing,companies will improve the degree of real earnings management,but the results are not significant.And the OLS model are used to verify that there is a negative relevance between the degree of accrual earnings management and the degree of real earnings management in the year when the private placement is implementing.According to the results of the study,it is concluded that the two types of earnings management are coexisting in the complementary relationship,and the degree of earnings management will be raised at the beginning of the lockout period.This phenomenon is also related to the regulatory environment.It is recommended that the SFC strengthen the supervision after the increase in order to better protect the interests of small and medium shareholders.