|
Author(s): |
Jing Long, PhD, school of management, Dalian University of Technology; Lecturer, school of economic- management, Dalian Nationalities University, Dalian
Yan-xi Li, Professor, school of management, Dalian University of Technology
Hong-yan Wang, Dalian University of Technology |
|
Abstract: |
Abstract: This paper empirically studies the impacts of various corporate governance mechanisms on earnings management of listed Chinese firms. We use seven variables to quantify various corporate governance mechanisms and earnings management. These include the concentration of shareholding among the three largest shareholders, whether the controlling shareholder is state-owner, number of the board, proportion of independent directors, whether the CEO is the head of the board, executive compensation, shareholding of top 3 executives. We use dealing accruals to measure earnings management. We find that, on average, earnings management is negatively affected by concentration ownership, whether the firm is state-controlled, board size, proportion of independent directors and executive compensation, while it is positively influenced by the duality of CEO. Therefore, such a significant relationship is good to discourage earnings management and improve the Chinese capital market developing healthily, stably and harmoniously.
|