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Research On The Influence Of Political Connection And Political Connection Cost On Earnings Management Of Private Listed Companies In Pharmaceutical Industry

Posted on:2021-04-29Degree:MasterType:Thesis
Country:ChinaCandidate:Y Y HuaFull Text:PDF
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Since the new medical reform in 2009,our government,as the leader of medical resource allocation and the main payer of medical insurance,has been continuously introducing relevant policies to lead the development of the pharmaceutical industry.Compared with the stateowned enterprises with natural political advantages,seeking political connection has become an important political strategy for many private enterprises to face the impact of reform.Political connection has stabilized the good relationship between private enterprises and the government,but it also gives the government more opportunities to intervene in the business management activities of enterprises.In order to meet the needs of local development,the government often transfers some performance indicators of employment and investment to the political connection enterprises,which leads to the political connection cost of private enterprises.This additional financial burden eventually leads to the enterprises In order to achieve the performance indicators,senior executives carry out earnings management to adjust the reported earnings.Firstly,based on the universality of establishing political connection in private enterprises of pharmaceutical industry,this thesis analyzes that the cost effect of political connection may be the main motivation of earnings management,and also discusses the political connection costs of private enterprises under the background of new medical reform.On this basis,it constructs a logical model to analyze the internal mechanism of political connection affecting earnings management.Secondly,empirical analysis is carried out with the listed pharmaceutical companies in Shanghai and Shenzhen main board in 2014-2018 as samples,and the typical cases are selected to verify the conclusions.The final result supports the logic of "private enterprise's political activities(seeking political connection)-causing political connection cost-leading to enterprise's earnings management behavior" : political connection positively affects enterprise's earnings management,and political connection costs play a mediating role in this relationship.In the investment and operation activities of private enterprises,political connection cost is mainly reflected in the tax burden,employee cost,non-productive expenditure,over investment and charity donation are higher,and political connection cost increases with the increase of political connection degree.This paper takes the political cost caused by the cost effect of political connection as a new research perspective,discusses the internal mechanism of the influence of political connection on earnings management of enterprises,enriches the measurement methods of political connection cost,and provides some enlightenment and suggestions for private enterprises to participate in political activities and the government to formulate the development plan of pharmaceutical industry.
Keywords/Search Tags:Pharmaceutical industry, Political connection, Political connection cost, Earnings Management
PDF Full Text Request
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