Empirical Study On The Relevance Of Real Earnings Management And Cash Dividend Policy

Earnings management is a systematic process of using various means to manipulate corporate earnings, etc, based on the specific motivations of corporate management. In accounting, according to their different embodiments, earnings management can be classified accrued earnings management and real earnings management. In recent years, much of accrued earnings management practices and academic concerns, companies continue to improve accounting standards, external supervision has been strengthened, so the implementation of accrual earnings management space is getting smaller and smaller, but more flexible real earnings management attracted the attention of managers. Real earnings management manipulate real trading enterprises that deviate from the normal business activities plan to achieve a specific financial goal, which will affect the current cash flow of operating, and thus affect the capacity of current cash dividends distribution. Most modern listed companies, based on trends in today’s capital markets, will choose the cash dividend distribution. In our country, in transition and emerging markets, due to the institutional deficiencies and imperfect regulatory,"dividend puzzle" has been a hot topic in academia; this paper conducted a systematic study of the hot topic and the new field of academic research-real earnings management.This paper explained the background and significance,research methods and ideas.Then, the real earnings management and dividend policy theories were reviewed, respectively.Based on the view that interest-driven is the underlying causes of the earnings management Ied,followed by select the2008-2012financial industry experience in listed companies as sample, referring Roychowdhury (2006) model, respectively, from the sale of control, production control and cost control to verify and measure the existence and extent of implementation of the sample companies real earnings management, and then by establishing a binary choice Logit model and OLS model empirical tested the relationship between real earnings management and distribution of cash dividends tendencies and efforts.The regression results show that the higher the degree of implementation of real earnings management, the lower the tendency of corporate profit distribution of cash dividends, that real earnings management and distribution of cash dividends tendency negative correlation; And the higher the degree of implementation of real earnings management, the lower level of the cash dividends, that real earnings management and distribution of cash dividend efforts is also a negative correlation. Further,by Chow robustness test found that the negative correlation was mainly influenced by the sample companies that implement positive earnings management, but with no significant relationship between the negative correlation and the sample companies that implement negative earnings management.Finally, the article from the perspective of real earnings management and cash dividends put forward some suggestions for improvement to reduce real earnings management behavior, and further improve the capital market, effectively protect the interests of investors.