The Relationships Research Of Earnings Management Activities And Corporate Investment Efficiency

Since the MM theorem had been proposed, researchersfrom world putforwardmany factors impact on corporate investment efficiency. But many researchersfocus more on internal cash flow, financing constraints, and the shareholding structureof listed companies in China empirical research, few factors on earning managementto consider the relationship with the corporate investment efficiency. Given thecurrent increasingproportion of private economy in China’s market economy, fairnessand efficiency in the capital of state-owned enterprises and private enterprises coexistissues have become increasingly prominent.So this paper considersthe nature of thefactors with our corporate special equity carried out a comparative study ofstate-owned enterprises and private enterprises. This paper selects the data from year2009to2011of Shanghai and Shenzhen listed manufacturing enterprises as the studysamples, combines with the actual situation of this paper to build for a measure ofbusiness investment efficiency and earning management degree model and empiricaltest enterprise surplus the relationship between the degree of earning management andinvestment efficiency, as well as explore the differencebetween state-ownedenterprises and private enterprises in this issue.The article is divided into a total of five chapters. Firstly, describing factors inaffecting earning management and corporate investment efficiency in each of tworesearch progress in the literature review and comment, as well as related researchbetween the two, laying the foundation for the theoretical analysis for later andempirical studies.Secondly, based on the literature review of existing relations theoryon corporate earning management and corporate investment efficiency combined withChina’s state-owned enterprises and private enterprises,this paper proposes threeassumptions and then does the empirical tests and analysis. Finally,theoutcomeconcludes the research for this article, as well as the policyrecommendations and limitations.The text results give mainly the following points: First, the extent of earningmanagement of state-owned enterprises is greater than the extent of earningmanagement of private enterprises. Second, Investment efficiency of state-ownedenterprises is lower than the efficiency of investment in private enterprises. Third, thecorporate earning management behavior reduces the efficiency of investment, that isthe extent of earning management and corporate investment efficiency is negatively correlated. Fourth, compared to the private enterprises, the extent of state-ownedenterprises between earning management and enterprise investment efficiencypresents a stronger negative correlation. This study provides the followingrecommendations for the development of China’s capital market and listed companies:improving the quality of information disclosure; improving the regulatory mechanismof listed companies; establishing a feasible and effective incentivesmechanism;improving capital markets environment, strengthening the construction of laws andregulations enforcement.