Research On The Between CEO Reputation And Earnings Quality Of China’s Listing Companies

CEO is the company’s helm,They have the final authority to run company and makemanagement decisions in the company,They can make company achieve success,and candestroy a company,good reputation and quality of the company ’s CEO is able to defuse thecrisis,some of the negative news of CEO will cause irreparable damage. With thedevelopment of the media,more and more people begin to focus on CEO reputation,CEOsbegin to focus on CEO reputation management. And Many scholars research CEOreputation,studies show that CEO reputation have an impact on corporate performance,internal governance and corporate financial behavior. CEO is the key manager in theCompany. In order to improve their’s reputation and career development, Do they manipulateearnings?Or Do companies employ a high reputation CEO to change this situation? Andwhen considering the ownership of company, Is there difference between CEO reputation andearning quality? This paper is to solve these questions.The author chooses listed companies in Shanghai and Shenzhen form2007to2011assamples,using the modified DD model and modified Jones model to measure the company’searnings quality,and using the media coverage rate as a proxy for reputation. There areendogenous between CEO reputation and Earnings Quality,so using the simultaneousequation regression models to evaluate the relationship of CEO reputation and earningsquality.We got three results: Firstly, the rent-seeking and matching theory can give betterexplanation than the efficient contract, namely there is a negative correlation between CEOreputation and earnings quality. Secondly,compared to private enterprises,state-ownedenterprises tend to employ a high quality reputation of the CEO to improve the company’searnings. Thirdly,We can know that there is a significant positive correlation between CEOreputation and CEO’s age,tenure,salary,government background,but there is no correlationbetween CEO reputation and CEO’s sex.