Research On The Impact Of Ultimate Control Right And Product Market Competition On The Earnings Management

The problem of earnings management,is not just the research topic in the field of corporate financial accounting,also is a research topic in the field of corporate governance,and attract the attentions of the academic circles.Numerous studies show that equity structure of listed companies is highly concentrated and the ultimate controlling shareholder is existed widely.The ultimate controlling shareholders of some companies use less cash flow right to obtain greater control right,which leading the ultimate controlling shareholders to have more motivation and the ability to grab the interests of other shareholder.At the same time,product market competition is becoming increasingly fierce,affect the company's production and operation decisions directly or indirectly.Based on these,this paper attempts to integrate the ultimate control right in the internal governance structure of the company and the product market competition in the external governance mechanism of the company into a unified framework,to explore the impact of the two on corporate earnings management.On the basis of combing domestic and foreign literature,this paper makes a theoretical analysis of earnings management.The ultimate control how to affect earnings management and product market competition how to affect earnings management are analyzed in theory respectively.The empirical research sample comes from the A-share listed company data of 2010 ~ 2015,a total of 1203 listed companies were selected after removing,a total of 7218 research samples,and distinguish the state-owned and non-state-owned samples according to the nature of the ultimate controlling shareholder,and measure the degree of earnings management from the two aspects of accrued earnings management and real activity earnings management,from two angles of in the industry and between industries to measure the degree of product market competition.On this basis,the empirical analysis is divided into three parts,respectively,put forward the assumptions,the construction of multiple regression equation,the regression results analysis,and robustness test,to a more systematic study of the ultimate control affect earnings management,product market competition affect earnings management and the impact of the interaction between ultimate control and product market competition on earnings management.Through the empirical study,the following conclusions are obtained: First,the higher the proportion of control owned by the ultimate controlling shareholder,the higher the degree of earnings management;Second,ultimate controlling shareholder's degree of separation of the two right is positively related to earnings management;Thirdly,the degree of earnings management of state-owned holding companies is lower than that of non-state-owned companies.Fourth,the company in the industry have stronger product market power,the lower the level of its earnings management;Fifth,the higher the level of product market competition,the higher the overall level of earnings management;Sixth,relative to the enterprise which ultimate controlling shareholder is the non-state-owned,the product market power in the industry have a stronger inhibitory effect on earnings management behavior of state-owned enterprises;the product market competition among industries has less effect on the earnings management of the state-controlled enterprises.Seventh,the higher the degree of separation of the ultimate controlling shareholder,the more will weaken the product market power affect earnings management on the degree of inhibition of the role;the more the product market competition in the industry to induce the degree of corporate earnings management.In view of the research conclusion,the following countermeasures and suggestions are put forward: First,introduce and improve the accounting information disclosure system and security related standards enforcement;Second,the separation of two rights should be controlled and the chain of controlling rights between enterprises should be shortened;Third,create a good atmosphere of market competition,be able to use the positive governance effect of product market competition.