Relatives Of The Actual Controllers Serving As Senior Executives And The Earnings Quality Of Family Business

As an important part of private economy,family business plays an important role in economic development,and the quality of earnings information is the focus of investors and creditors in the capital market.The actual controller of family business is the core person of family business,and plays a decisive role in the process of management and strategy making of family business.As a Chinese family business that attaches great importance to the traditional Chinese "family culture",the actual controller of the family business is more inclined to let his relatives serve as the executives of the company.Previous studies have shown that this kind of behavior of family business will reduce the conflict of interest between controlling shareholders and management,reduce the first kind of agency cost,but it will cause the conflict of interest between large shareholders and small shareholders,and then improve the second kind of agency cost.These two kinds of agency problems will promote the management to make profits through earnings management behavior,and then affect the earnings quality of the company.However,what kind of impact will the actual controller's relatives have on the earnings quality of family business? Through in-depth study of this issue,the analysis of the influencing factors of earnings quality of family business will help enrich the related research of family business,improve the governance mode of family business,and then help the healthy and stable development of family business in China.First of all,this paper reviews the research status of earnings quality and kinship of family business at home and abroad.Based on the principal-agent theory and social emotional wealth theory,this paper makes a theoretical analysis of the relationship between senior managers and earnings quality of relatives of the actual controllers of family business,and puts forward research hypotheses.Then,taking China's listed family enterprises as a sample,this paper empirically studies whether the relative executives of the actual controllers will have an impact on the earnings quality of family enterprises through regression model.The results show that,compared with the family business with no relatives,the family business with relatives has better earnings quality,which is affected by the external supervision and governanceenvironment.In the family enterprises with low shareholding ratio of external institutional investors and the areas with low marketization degree,the positive influence of the position of the actual controller's relatives on the earnings quality will be more significant.Then,PSM test,sub sample test and loss persistence model are used to test the robustness of the empirical results.In addition,according to the research of different kinship,we find that the distance and type of kinship have no significant impact on the earnings quality of family business.Finally,the conclusion of the study is summarized,and some suggestions are provided to improve the corporate governance of family business.The possible contributions of this paper are,on the one hand,providing a new way for the actual controllers of family businesses to influence the corporate governance behavior by investigating the influence of family control on the earnings quality of enterprises from a new perspective of the relatives of the actual controllers of family businesses,on the other hand,providing a new method for the analysis of corporate governance research by integrating the sociological research scope of kinship into the corporate governance research,and conducting the research according to the kinship distance through different kinship relationships Assignment,the quantitative analysis of kinship.