Study On The Influence Of Equity Pledge By Major Shareholders On Real Earnings Management

The equity of public companies has strong liquidity.When major shareholders of public companies are short of funds,major shareholders can finance by equity pledge.However,when the price of pledged shares declines to the level of risk warning,shareholders will face great pressure to be liquidated.In order to stabilize or improve the stock price,the major shareholders may use their control power to achieve the earnings situation by means of real earnings management.Enterprise life cycle theory holds that enterprises with different life cycles have obvious differences in operating conditions,financing constraints and other aspects.Then,after equity pledge by major shareholders,there may be significant differences in the motivation and ability of enterprises to implement real earnings management in different life cycles.In this study,we selected A-share listed companies from 2013 to 2017,and used the method of empirical research to explore the relationship between the equity pledge of major shareholders and real earnings management from perspective of enterprise life cycle.The results show that :(1)Compared without the equity pledge of major shareholders,the real earnings management degree of the listed companies with the equity pledge of major shareholders is higher.And the higher the equity pledge ratio is,the higher the level of real earnings management is.(2)Compared with mature enterprises,there is a higher positive correlation between the proportion of pledge of major shareholders and real earnings management in growing enterprises.(3)compared with mature enterprises,there is a higher positive correlation between the proportion of pledge of major shareholders' equity and real earnings management in the recession period.This paper introduces the dynamic variable of enterprise life cycle,which will provide some help to the research on equity pledge and real earnings management,and has certain inspiration and reference value.