Division Of Labor And Earnings Management Within The Group’s Industrial Chain

Adam Smith first mentioned the theory of division of labor in "The Wealth of Nations" in 1776,pointing out that division of labor can improve the productivity of society.There is also a division of labor system within enterprise groups,and companies at different positions in the industry chain within the group perform their duties together to create value for the enterprise group.For the research on enterprise groups,the previous literature mainly focused on the characteristics of the company’s equity,and there are few studies on the division of labor in the industrial chain,and whether there is a relationship between the division of labor in the internal industrial chain and earnings management has not been verified.Therefore,this paper studies the listed companies that participated in the division of labor within the group’s internal industrial chain from 2008 to 2019 as the research object,and empirically tests the relationship between the division of labor within the group’s internal industrial chain and earnings management.The study found that:(1)companies in the middle reaches of the group industry chain have lower earnings management levels;(2)the higher the degree of equity balance,the more significant the group industry chain division of labor has on the earnings management level;(3)the higher the firm’s reputation Under circumstances,the division of labor in the group’s industrial chain has a more significant impact on the level of earnings management.Compared with the past research on the division of labor in the group industry chain,the contribution of this article is:(1)This article focuses on the division of labor in the group industry chain and the level of earnings management for the first time,providing a new perspective on the economic consequences of the division of labor in the group industry chain;(2))This article further improves the measurement method of the division of labor in the group industry chain,and improves the stability of the explanatory variables of the division of labor in the group industry chain;(3)Finally,this article supplements the factors that affect earnings management and expands new ideas for the research on earnings management.