Volatility In Listed Companies’ Asset Valuation Rate: Large Shareholders Expropriation Or Earnings Management

Listed companies’ asset restructuring activities, which emerge in endlessly, is oneof the most watched phenomenons. These asset restructuring activities are usuallyrooted in listed companies’ opportunistic behavior, i.e. large shareholders expropriationand earnings management. Because asset valuation is the core pricing part of listedcompanies’ asset restructuring activities, so its results certainly influence by listedcompanies’ motivation. This dissertation will use asset valuation rate to observe andstudy whether listed companies could exert an influence on the result of asset valuationout of large shareholders expropriation motivation or earnings management motivation.To begin with, this dissertation reviews relevant domestic and foreign referenceson asset valuation rate, and finds that foreign references mostly focus on therelationship between asset valuation rates and changes in stock prices, and domesticreferences mostly concern about microcosmic influencing factors of asset valuationrates.Then is theoretical analysis, based on the systematic analysis of the root causes ofasset valuation rising in value and its influencing factors, this dissertation concludes thatlisted companies has the motive and opportunity to affect the asset valuation rates, andanalyses the specific impact of the large shareholders expropriation motivation andearnings management motivation on asset valuation rates.Descriptive statistics and empirical analysis of relevant data is the focus of thisdissertation. Based on the assets to be valuated will flow into the company or out of thecompany, this thesis divided samples into listed companies inject assets and set outassets. Based to the transaction object of the assets to be valuated, this thesis dividedsamples into transact with large shareholders, general related parties and non-relatedparties. Based on whether the listed company is meager profit, loss, or designated as a“special treatment” stock, this thesis also divided samples into listed companies whichhave earnings management motivation and listed companies which do not have earningsmanagement motivation. This thesis uses non-parametric test (Mann-Whitney U test) toexamine whether there are significant differences between two sets of data to determinewhether large shareholders expropriation motivation or earnings managementmotivation makes a significant impact on asset valuation rate. The results show that in the case of listed companies inject assets, the asset valuation rate of inject the largeshareholders’ assets is significantly lower than that inject other parties’ assets, and theasset valuation rate of listed companies which have earnings management motivation issignificantly lower than that of listed companies which do not have earningsmanagement motivation. The results also show that in the case of listed companies setout assets, there are no significant differences between transact with large shareholdersand transact with other parties, and there are no significant differences between listedcompanies which have earnings management motivation and listed companies which donot have earnings management motivation. As a conclusion, this thesis believe thatlisted companies did not take advantage of asset valuation to transfer benefits to largeshareholders directly, but listed companies could influence asset valuation rates becauseof preventing loss, turning deficits, keeping the honor "Listed Company" or otherearnings management motivations from2009to2011.Finally, there is a summary of this thesis，which clarifies the basic conclusions，limitations, and future research prospects.It has two innovative points:(1) This dissertation has conducted the first systematicstudy of the influence on asset valuation rates of listed companies’ large shareholdersexpropriation motivation and earnings management motivation. As a conclusion, thisdissertation believes that, in general, listed companies could influence asset valuationrates because of earnings management motivation rather then large shareholdersexpropriation motivation from2009to2011.(2) Due to the changes in the conditions ofthe rights issue, this dissertation proposes that listed companies’ earnings managementmotivations mainly relate to preventing loss, turning deficits, keeping the honor "ListedCompany". So this dissertation proposes that it could based on whether the listedcompany is meager profit, loss, or designated as a "special treatment" stock todetermine whether it has earnings management motivations or not. This method couldbe helpful to future relevant research.