Research On The Influence Of Independent Directors Network Of Listed Companies On Real Earnings Management

Network relation is a basic and widespread feature of all economic behavior.through the coupling relationship and the social network,people or organizations are able to realize the exchange and sharing of information,and decision-making and all behaviors of economic agents will be influenced and restricted by each member of the social relation network and the network structure.Director network is a reflection of social network relation in the aspect of corporate governance,it not only affects the behavior of individual director in participating in corporate governance practices and decisions,but also because of the consultation and supervision function and play an important role in earnings management governance.Existing literature suggests directors board characteristics variables,such as the proportion of independent directors in the board,the board size.combined title of board chair and CEO were significantly affected the degree of earnings management of listed companies and the earnings information quality.But most of these studies ignore the effect of the relationship between the board properties,only describe members of director board as completely independent,rational and self-interested individuals,rather than from the aspect that a member in the network influence each other.However,at present in our country a universally existing reality is a director(mainly independent directors)takes office at the same time in two and two or more company's director board,and a director board member who occupies multiple board seats in a few listed companies and with rich social relations can obtain important social capital from the director network,to raise their ability of corporate governance.Based on this,the research topic of this article is the relationship between director network and corporate governance,we choose earnings management as the proxy variable of corporate governance effect,and starting from the angle of real earnings managementThis paper mainly revolves around the following issues:How the director network affect the enterprise real earnings management?Do property rights affect the relationship?Is there any difference between roles financial and non-financial background of independent directors network characteristics playing in enterprise real earnings management?Based on this,this article selects 2010-2017 A-share listed companies as research samples,systematically tests the influence of directors network centrality on real earnings management,and then examines whether property rights will perform the regulatory effect.According to theoretical analysis and empirical test,main research conclusions are:First,the system arrangement that the independent director is included in the director board structure of listed companies in our country can effectively restrain the degree of real earnings management.A director occupying the core location in the director network will have high initiative and willingness to carry out supervision,holds more abundant information and professional knowledge,and is located in the better supervision environment,accordingly,the director can more effectively fulfill their duties of supervision and restrain enterprise's real earnings management behavior to operation profit up,representing as independent director's network centrality is negatively related to the overall level of real earnings management.Second,whether the independent director can play the network governance effect on real earnings management are under the influence of the property rights of listed companies.In state-owned listed companies,the government will interfere the business of the board,so the board's real power is more constraint.the board of directors and the company large shareholders tend to be more strong,can decide the company directors'choosing and hiring.In this case,accordingly independent directors will occupy a lower status in corporate governance,difficult to express their views in the decision-making process.As a result,the independent director is more difficult to carry out their supervision function objectively and fairly,and then this property nature also weakens the governance effect of independent director network centrality to real earnings management.In addition,this paper uses the non-state-owned listed companies as the research object,independent directors can be divided into two groups respectively with financial and non-financial background,calculates independent directors network centrality and then takes regression test with real earnings management,to test whether independent directors with financial background and professional knowledge advantage play a prominent role in curbing real surplus management,then through regression analysis we conclude that whether independent directors with financial background or non-financial background center and improve network location can reduce the enterprise's overall level of real earnings management.We don't find the specialized financial background will affect the relationship between network location and real earnings management.Through empirical researches,this paper inspects the independent directors network location's governance effect on real earnings management of the company,this paper studies the governance effect network location of the independent director plays on the company's real earnings management,which makes an incremental contribution for the research literature about independent directors and real earnings management.Research conclusions can provide enlightenment for the board structure design,selection of independent directors candidates,the measure and regulatory of enterprise real earnings management,and how to fully play independent director regulation's corporate governance mechanisms,and provides some valuable research thinking and realistic enlightenment.