An Empirical Study On The Impact Of Earnings Management On Firm Value Under Different Life Cycles

Since entering the 21 st century,with the rapid growth of economy,the development of capital market in China has entered the acceleration phase.But because of a shortage of effectiveness of the market in China,Information reflected in the market cannot represent the true financial status of enterprise completely,so that more and more enterprises begin to adopt earnings management to perfect information's released outside within accounting standards in order to satisfy the demands of enterprise development strategy.When the enterprise in different life cycle stage,Enterprises faced different management risks and development goals.so the enterprises in different life cycle stages have different purposes and motivations of earnings management,thus will have different influences on the value of the enterprise.Pharmaceutical manufacturing companies in China,with its character of high risk,high income,and high public welfare,strategic and competitive etc,was rated as one of the most potential industry in the 21 st century.The growth of enterprise value growth in pharmaceutical manufacturing enterprises is closely linked with China's economic growth,social progress and degree of national health.So it has profound theoretical and practical significance to discuss our pharmaceutical manufacturing enterprises under different life cycle of the influence of earnings management on the enterprise value from the perspective of enterprise life cycle.This paper first introduces the research background,significance,content,technolog y routes and innovations,and then review of domestic and foreign scholars` research result s including enterprise value,corporate lifecycle and earnings management.Then,after defi ning the relevant concepts,this paper makes theoretical basis for the empirical research i n this paper by using life cycle theory,principal agent theory and asymmetric informatio n theory.Calculate the(DA)of the sample companies using the modified Jones mod el to measure earnings management.Establish 6 assumptions using multiple regressi on model depending on the differences of directions' of Earning management and Life cycle phases to make empirical analysis.The research results show that positi ve earning management is positively correlated with the value of enterprises of Chi na and negative earning management is negatively correlated with t-he value of ent erprises in growing pharmaceutical enterprises;Either positive and negative earning management is negatively correlated with the value of enterprises in mature pharm aceutical enterprises;Neither positive and negative earning management is correlated with the value of enterprises in declining enterprises.