The Ultimate Ownership Structure,Property And Accounting Conservatism

In the era of rapid development of the market economy,information as the basis for decision making,its quality has become the focus of attention of stakeholders..Accounting conservatism uses the measurement method of loss and income asymmetry confirmation to improve the quality and robustness of accounting information of listed companies Some studies have found that corporate governance mechanisms affect the accounting conservatism.And the influence of equity structure,which is an important component of corporate governance,on accounting conservatism cannotbe overlooked.In particular,under the prevailing background of pyramid equity structure,equity is highly concentrated in ultimate controller,the problem of agency between major shareholders and small and medium shareholders is prominent,which provides a new perspective for studying the influence of equity structure on accounting conservatism.The Pyramid equity structure is a common form of equity in China,Which is the important way for the ultimate controller to strengthen control.Studies have shown that under different property,the motives for its formation are different.Under the political background of the reform of state-owned enterprises,most of the state-owned enterprises forming the pyramid equity structure are driven by policies push.By building a pyramid structure,a natural separation zone is formed between the government and the company to decentralize power and reduce of intervention.In non-state-owned enterprises,on the one hand,the ultimate controller realize the separation of control rights and cash flow rights by constructing a pyramid equity structure,which facilitates the implementation of profit transfer or other profit-making purposes.On the other hand,many studies have found that in private enterprises with strong financing constraints,the ultimate controller finances through internal capital markets formed by the pyramid equity structure,alleviating the financing constraints.However,existing studies on the ultimate ownership structure and accounting conservatism often do not distinguish property rights when studying the relationship between theseparation of two rights and accounting conservatism.And they have rarely distinguished the different movements of the pyramid structure under different property.Therefore,based on the different motivations of pyramid structure formation,this paper starts from different types of ultimate controllers,and studies the influence of ultimate ownership structure on the accounting conservatism under different property rights.This paper takes the A-share listed company from 2007 to 2016 as a sample.And Khans and Watts(2009)C-score is used to measure accounting conservatism,..Based on the different property of the ultimate controller,this paper conducts an empirical study on the relationship between cash flow rights,separation of two rights,and accounting conservatism.The study finds that:(1)The greater the cash flow rights the higher the accounting conservatism of listed companies.(2)The positive effect of the cash flow rights on accounting conservatismis stronger in state-owned enterprises than enterprises whose ultimate controller is non-government.(3)The greater the separation of cash flow rights and control rights of non-state-owned ultimate controllers,the lower the accounting conservatism of the listed company.(4)In the listed companies with state-owned ultimate control,the increase in the separation of cash flow rights and control rights enhances the accounting conservatism of listed companies.Further,divided the state-owned enterprises into central enterprises and local state-owned enterprises,it is found that there is a significant positive correlation between the separation of cash flow rights and control rights and the accounting conservatism in the central enterprises.However,in the local state-owned enterprises,the separation of t cash flow rights and control rights has not found statistically significant result.Considering the incentive effect of cash flow rights and its role of mitigating financing constraints in non-state-owned enterprises and the effect of separation of cash flow rights and control rightson reducing the government intervention and bringing about managerial agency issues in state-owned enterprises,In a further analysis,it is found that the positive relationship between cash flow rights and accounting conservatism in non-state-owned enterprises will weaken with the increase of cash flow rights,and there is a single threshold;In the central enterprises,the positive relationship between the separation of two rights and accounting conservatism will weaken with the increase of the separation of two rights,and there is a double threshold.The main structure of this paper is as follows:Chapter 1,Introduction.It mainly includes the research background and research significance of this paper,related important concepts and research contents,etc.Chapter II,Literature Review and Review.This part discusses the research status at home and abroad from accounting conservatism,pyramid equity structure,ultimate ownership structure and accounting conservatism.Then it reviews the literature and proposes the content of this paper.The third chapter,theoretical analysis and research hypothesis.This part analyzes the ultimate controller’s influence on accounting conservatism from the aspects of principal-agent theory,information asymmetry theory,incomplete contract theory and control rights theory,and then put forward the research hypothesis of this paper.Chapter IV,Research Design.This section mainly constructs the model used in empirical analysis,defines the definition of related variables,and explains the data sources and sample selection process.The fifth chapter analyzes the empirical results.This chapter mainly includes the basic analysis results of variables and empirical regression results,and finally the robustness test and further analysis..Chapter VI,study conclusions and policy recommendations.This chapter summarizes the conclusions,and then proposes corresponding policy recommendations based on the relevant institutional background and governance status.The main innovations of this paper are as follows.Firstly,based on the nature of ultimate control rights,the research on corporate governance effect of pyramid ownership structure is expanded.Secondly,under the background of state-owned enterprise reform,weresearch the reductionof government intervention by constructing pyramid equity structure.The positive effect on the governance of state-owned enterprises further confirms the motives and governance of the separation of the two rights under different property rights.Third,when there is a problem of structural mutation in existing research,group regression or the introduction of square terms is commonly used.Different from previous studies,this paper uses the panel threshold model to explore the threshold of ultimate ownership structure and accounting conservatism The research method is more scientific.The model setting is more reasonable and the research conclusion is more convincing.