Earnings Management,Cash Dividend And Inefficient Investment

Earnings management and inefficient investment have been the topics of concern for scholars in recent years.Higher accounting information quality can promote the investment efficiency of enterprises,and the company's earnings management behavior will mask its true operating performance,reduce the quality of accounting information,exacerbate information asymmetry,and mislead external investors and internal decision makers' judgments on the enterprise As a result of inefficient investment,how to suppress the adverse impact of earnings management on the investment efficiency of enterprises has important practical significance.It has been confirmed that cash dividends based on the dividend signal effect theory and free cash flow hypothesis can play an important role in the governance of corporate information asymmetry and principal-agent issues.Therefore,this paper studies the relationship between earnings management behaviors and inefficient investment of enterprises,and analyzes the impact path in depth.It introduces cash dividends as moderators,studies its governance of the relationship between them,and tests its mechanism.In this paper,the data of China and Shenzhen A-share listed companies from 2008 to2018 is used as a research sample.The Richardson investment expectation model is used to calculate the inefficient investment level as the explanatory variable.The modified Jones model is used to calculate the degree of earnings management as the explanatory variable.The dividend payment rate is introduced.We measured cash dividends as moderators,established an empirical model,examined the relationship between earnings management and inefficient investment by enterprises,and the impact of cash dividends on the relationship between the two,and analyzed the impact mechanism in-depth,and reached the following conclusions:First,earnings management has a positive correlation with inefficient investment.The higher the degree of earnings management,the higher the inefficient investment.The regression analysis of overinvestment and underinvestment shows that there is a significant positive correlation between the degree of earnings management and overinvestment and underinvestment.The higher the degree of earnings management,the more severe the overinvestment or underinvestment of the enterprise.Second,cash dividends can significantly inhibit the positive correlation between earnings management and inefficient investment,that is,cash dividends can improve the adverse impact of earnings management behavior on corporate investment efficiency.The sample of overinvestment and underinvestment returns,and the research results are still significant,that is,cash dividends can improve the adverse effect of earnings management on overinvestment or underinvestment of enterprises.Third,we examine the impact of earnings management on inefficient investment and find that information asymmetry plays a part in mediating the relationship between the two.Earnings management behavior deepens the inefficient investment behavior of enterprises by deepening the asymmetry of information inside and outside the enterprise.According to the degree of information asymmetry and the level of agency costs,the effect of cash dividends on the relationship between earnings management and inefficient investment is examined.It is found that the improvement of cash dividends on the relationship between earnings management and inefficient investment exists significantly in the sample of high agency costs,and It is not significant in low agency cost samples;it is significant in high information asymmetry samples,but it is not significant in low information asymmetry samples,indicating that cash dividends can better alleviate earnings management caused by high agency costs and high information asymmetry companies Inefficient investment,which in turn improves investment efficiency,shows that cash dividends can improve the adverse effect of earnings management on the company's investment efficiency through the governance of information asymmetry and the agency problem.The research in this paper not only enriches the literature research on the economic consequences of earnings management and the factors affecting inefficient investment,but also provides theoretical support and empirical evidence for companies to control earnings management and improve investment efficiency.It has positive theoretical and practical significance.