Controlling Shareholders' Stock Pledge,Earnings Management And Investment Efficiency Of Corporates

Following a series of major events,such as the stock price bursting of Le TV Network and the formal implementation of the new rules on equity pledge,equity pledge has become a topic of concern in both practical and academic circles.Controlling shareholders will directly or indirectly influence listed companies because they have significant decision-making power in operation.After the pledge of shares,controlling shareholders face the risk of the value of pledged shares falling.If the share price falls below the closing price,controlling shareholders may lose control power.Therefore,controlling shareholders are likely to manage earnings in order to uphold stock prices.Financial information is an important basis for investors to identify and judge investment projects.Earnings management will lead to direct reduction of the quality of financial information in enterprises,which may affect investors' decision to lead to inefficiency of investment.This paper use data of A-share Listed Companies in Shanghai and Shenzhen of 2003-2017.From the perspective of real earnings management and accrued earnings management,this paper discusses the influence of earnings management behavior under the pledge of controlling shareholders' equity on the investment efficiency of enterprises.It is found that the level of upward real earnings management and upward accrued earnings management of companies with pledge of controlling shareholders' equity has increased significantly.The magnitude of two types of earnings management has a significant negative impact on the investment efficiency of enterprises.The intermediary effect test shows that in the positive samples of real and accrued earnings management,earnings management play a significant intermediary role in the relationship between controlling shareholders' equity pledge and investment efficiency.Besides,in real earnings management,production manipulation has a significant mediating effect,and discretionary cost manipulation has a significant "cover-up" effect.