The Study On The Influence Of Company Liquidity And Earnings Management Which Is Caused By Shareholding Structure

This article studies the ownership structure of Taiwan listed companies, the relevance between Board property and company liquidity value, also discuss about the effect monitoring mechanism for shareholding which are held by internal shareholders and institutional investors, this study is from the perspective of the core agency problem. The empirical results show that:(1) It has positive correlation between shareholding by managers and the corporate’s value, supporting the interests of the convergence hypothesis; and ultimately controller(family) hold more shares, this will cause company liquidity value goes down.(2) There is non-linear relationship between company liquidity value and manager’s shareholding ratio or family ownership ration, when the manager shareholding ratio is below 25%, the shareholding ratio was positively correlated with the company value, but when the shareholding ratio is higher than 25 %, the shareholding ratio and the company value showed a significant negative relationship.(3) Comparing the interests agency problem between managers and shareholders and the core agency problem between family shareholders and few other shareholders, managers and shareholders have more negative impact to the company value, which means the core agency problem has lower agency cost.In addition to study the ownership structure of Taiwan listed companies, the relevance between Board property and earnings management, also discuss about the effect monitoring mechanism for shareholding which are held by external shareholders and institutional investors. The empirical results show that:(1) It is negative correlated between shareholding by managers and earnings management, supporting the interests of the convergence hypothesis.(2) The greater degree of deviation between the control rights and cash flow claims, the greater the degree of earnings management will be, this shows the core agency problem will increase the earnings management.(3) There is non-linear relationship between managers shareholding ratio and earnings management, when the manager shareholding ratio is below 5%, it has significant negative relationship with the earnings management, when the manager shareholding ratio is between 5%-25%, and it has significant positive relationship with the earnings management.(4) The degree of deviation between control rights and cash flow claims, it just influence the earnings management when the samples raised their earnings motivation, this shows the relationship between earnings management and interests agency problem or core agency problem, this will be obvious when the company is facing loss or avoiding negative earnings, it means managers or controlling shareholders will make the earnings smoother in order to reach the threshold of earnings, there will be a strong motivation for them to do the ear nings management.(5) Earnings management will be more obvious when directors and supervisors share pledge or General Manager is part-time by Chairman, but this can be improved by increasing the shareholding ratio which isholed by directors and supervisors, institutional investors and external shareholders.