The Impact Of Short Selling On The Real Activity Earnings Management

The margin trading system introduced short selling for China's capital market.Since March 31,2010,it has been expanded step-by-step according to the principle of strictness to wideness.The gap between the scale of margin financing and securities lending is extremely big,and the controversial about the role of the margin trading system still exists.The existing research indicates that the margin trading system can play a governance mechanism and reduce the company's earnings management behavior,while it lacks an in-depth study on the way in which the step-by-step policy expansion plays a role.The provisions of the science and technology innovation board points out that it is necessary to promote the balanced development of the margin trading system.Under the background,it is of theoretical and practical significance to study the impact of the margin trading system.This paper takes the 2008-2017 Shanghai-Shenzhen A-share listed companies as the research sample,the companies that are included in the margin trading system are treated as the test group,and those who are not included in the margin trading system are treated as the control group,using multi-period DID to study the impact of the margin trading system on earnings management.The study finds that the margin trading system can reduce the real activity earnings management of enterprises,and the governance role is influenced by factors such as the nature of corporate equity,the proportion of institutional investors,and the external market environment.Due to the small scale of securities lending and the weak effect of post-punishment,the governance effect is mainly played by pre-deterrence,and the restraining effect is gradually weakened with the step-by-step expansion.Further research shows that the margin trading system can reduce the negative impact of real activity earnings management on future performance.The research in this paper enriches the research scope of the short selling system,and reveals the influencing factors and mechanism of the governance effect of the margin trading system.While providing reasonable evidence for the promotion of China's margin financing and securities lending system,it also provides theoretical and practical support for China's continued deepening of financial system reform.