Research On The Relationship Between Vertical Dyad Linkage Characteristics Of Top Management Team And Financial Fraud

Nowadays,the financial fraud behaviors in the listed corporations are emerging in an endless stream,with more and more great harm,which has been widespread concerned by domestic and foreign theorists and practitioners.The Iceberg Theory suggests that the fraud is an iceberg in the sea,whose structural part is above the water,leaving a much larger portion beneath the surface of the water that is the most dangerous and most fundamental part of the fraud called behavior.But previous research of corporate financial frauds was affected by the homogeneity assumption of New Classical Economics,and took the top management team(TMT)as a whole whose members were homogeneous,which didn’t open the black box of TMT to find the interaction effect among different members.So we can see that previous research is not consistent with the reality because of the interaction of different characteristics of different members.This thesis is based on the perspective of national economic security,testing the effects of vertical dyad linkage characteristics of TMT of age,degree,gender and tenure on financial frauds and the moderating role of power allocation structure.The theoretical analysis of this thesis suggests that the vertical dyad linkage characteristics of TMT will inhibit financial frauds when they are in conformity with social norms and cultural context,and power structure,institutional investors,ownership type will adjust their relationship.With data of Shanghai and Shenzhen A-share listed corporations from 2009 to 2014,this thesis analyzes the relationship between vertical dyad linkage characteristics of TMT and financial fraud and the moderating role of power allocation structure,institutional investors and ownership type with normative analysis method and empirical analysis method.In the part of normative analysis,the research hypotheses are put forward with the review of related literature and the related theories.In the part of empirical analysis,the relationship is found by logistic regression.One conclusion of this study is that the vertical dyad linkage characters of age,degree and tenure have significant effect on financial fraud,that is to say,when the president is older than the management group members,or the president’s degree is higher than the management group members,or the president’s tenure is longer than the management group members,the possibility of financial fraud will decrease,otherwise,it will increase.Another conclusion of this study is that power structure has moderating impact on the relationship between the vertical dyad linkage characters of age,degree and tenure and financial fraud,if the power of the management group members is more than the president’s,it will inhibit the negative relationship of them two.The third one is that institutional investors also have moderating impact,which will strengthen the inhibition effect on financial frauds by the vertical dyad linkage characters of age,degree and tenure.The last conclusion is that ownership type will moderate the relationship of the two,that is to say,the inhibition effect on financial frauds by the vertical dyad linkage characters will be stronger in non-state-owned companies.This thesis can be divided into six parts:The first part,introduction.It gives an introduction of the background and the significance of the thesis,and then comes up with its train,methods and innovations.The second part,literature review.It gives an introduction of the review of related literature.From the review it points out this thesis’s research contents.Thirdly,It gives an introduction of the related concepts contains top management team,vertical dyad linkage characteristics and financial fraud,and then introduces the related theories to lay a theoretical foundation for this thesis,and finally,put up with the research assumptions base on theoretical analysis.The fourth part is the study design.It introduces the data sources,samples,variables and the logistic regression model.The fifth part is regression results.It includes the description of the statistics the empirical regression results and the robust tests.At last,it’s the conclusions and recommendations.It makes suggestions on the conclusions with the reality background of our country to suppress financial fraud behaviors.And it also shows the limitations of this research.