Managerial Ownership,Customer Concentration And Real Earnings Management

The customer is an important strategic resource for the enterprise which is valued in the production and consumption cycle of the product market.Enterprises inevitably have the will to hold the chronical partnership which is of significance.Enterprises can obtain generous return from the special relationship investment and strengthen the competitiveness of the product market.In recent years,the degree of customer concentration has shown an upward trend,but the higher customer concentration may trigger the opportunistic risk from enterprise and the high conversion cost of the special relationship investment.Also,the customer’s future business expect to the company becomes the pressure of the enterprise.The use of information advantages lead to corporate moral hazard and even modify the financial statements.Considering the external environment of China’s manufacturing enterprises overcapacity in recent years,enterprises may implement opportunistic behavior to improve business performance and reduce the fluctuation possibility of profit which may lead to earnings management.It has both the theoretical and practical significance to study the real earnings management of the enterprise from the perspective of external customers,which enriches the motivations of the real earnings management of the enterprises and helps the enterprises to handle the interests of the key customers better.After the management has given a certain number of shares,the management has the right to claim the surplus value,the change of identity may lead to different starting point of its business decision-making,which will influence the enterprise and customer interests differently.On the basis of discussing the influence of customer concentration on the real earnings management of the enterprise,the paper further studies whether the management will affect the real earnings management behavior under the customer’s motivation.Based on the theory of principal-agent,this paper analyzes the influence of the dependence of the enterprise on the enterprise’s earnings management and the influence of the management on the real earnings management under the customer’s motivation,which also means management stake,customer concentration,real earnings management of the relationship between the three.Based on the research model and research method of Rowchowdhury(2006),this paper uses the empirical method to study whether the customer concentration will induce the real earnings management behavior of the enterprise.For the sake of the customer,what are the controls that will be chosen by the firm when it is manipulated by the firm,and what impact will it be on the real earnings management of the customer after the management has given a certain number of shares.With collecting the sample company and empirical regression,the conclusion is drawn:the higher the customer concentration,the stronger the motivation of the enterprise real earnings management;the implementation of the real surplus manipulation for the customer’s reasons mainly includes the production manipulation and the discretionary cost manipulation;managerial ownership can reduce the real earnings management behavior that customers trigger.