Vertical Interlocks Of Executives,State Ownershi P And Accounting Information Quality

At present,interlocks of executives have become a common phenomenon in listed companies,and relevant scholars make research from the acquisition of resource,diversification strategy,organizational function,accounting information quality,capital allocation efficiency,profitability and other aspects.These studies enriched the relevant theories.However,most of the previous studies have focused on the study of horizontal interlocks of executives,less research on vertical interlocks of executives,and have not yet reached a consistent conclusion.Based on agent theory,this paper examines the effects of affiliated executives working in controlling shareholder on the accounting information quality.This paper contributes the literature on vertical interlocks of executives,and extends the researches on accounting information quality and agency problems.Based on the analysis of two different agent theories,this paper makes a different explanation of the phenomenon of vertical interlocks of executives,and analyzes its different influence on the quality of accounting information of listed companies.On the one hand,based on the agency theory of shareholders and managers,the vertical interlocks of executives can be regarded as a major means for shareholder to achieve supervision of listed companies,and it can effectively curb the opportunist behavior and information manipulation of managers,so as to ensure that the higher the quality of accounting information of listed companies,that is,vertical interlocks of executives to help improve the quality of accounting information of listed companies.On the other hand,based on the agency theory of the major shareholders and small shareholders,the vertical interlocks of executives may be the major means for shareholders to strengthen the control of listed companies,obtain the private benefits,which provides convenience for large shareholders to manipulate listed companies accounting information,that is,vertical interlocks of executives will reduce the quality of accounting information of listed companies.This paper chooses the non-financial listed companies that issued A shares from 2004 to 2013 as the research samples.This paper draws on the DiscretionaryAccruals to measure the degree of earnings management of listed companies,and the Discretionary Accruals is on behalf of the quality of accounting information of listed companies.This paper uses the cross-section correction of the Jones model and double D model to measure the degree of earnings management in order to enhance the robustness of the results of the article.After the Hausman test,this paper uses a fixed effect model for regression analysis,and control annual and industry effects during regression.We find that the accounting information quality is positively correlated with vertical interlocks of executives,which is mainly occurred in state-owned enterprises.Under the further examination,we also find that the agency cost is negatively correlated with vertical interlocks of executives,which is mainly occurred in state-owned enterprises.These findings suggest that vertical interlocks of executives,as a means for stockholders to strengthen their supervision on the managers of listed companies,can effectively alleviate the agency conflicts between shareholders and the managers and thus result in high-quality accounting information.