Investor Attention,earnings Management And Long-term Wealth Effect

Since the introduction of the financing method of directional issuance in China,securities regulators have constantly revised and improved relevant policies,formulated clear operational guidelines and norms for directional issuance,and combined with its own issuance advantages,attracted more and more investors' attention.At present,there are two main directions for the study of issuance,One is to pay too much attention to the fundamentals of related listed companies,which is limited to the impact of directional issuance financing on stock prices.The other is to pay attention to the short-term impact of directional issuance on stock prices and the announcement effect of directional issuance,to cater to the short-term speculation of market.There are few literatures on the long-term performance after directional issuance implemented,and fewer studies on the long-term wealth effect from the perspective of the protection of the interests of ordinary investors.In the secondary stock market,the investing enthusiasm of ordinary investors is increasingly.Investors' attention affects the information absorption and price changes in the stock market.However,due to information asymmetry and principal-agent problems,the interests of small and medium-sized investors are often not guaranteed.In the parallel market,the investing enthusiasm of ordinary investors is increasing day by day.Investor attention affects the information absorption and price changes in the stock market.However,due to information asymmetry and principal-agent problem,the interests of small and medium-sized investors are often not guaranteed.Therefore,this paper studies the relationship between earnings management and long-term wealth effect based on the protection of investors' interests.From the perspective of reducing information asymmetry in stock market and strengthening corporate governance,this paper illustrates that investor attention restrains the negative impact of earnings management on long-term wealth effect,provides theoretical reference for ordinary investors' investment decision-making,andhas important significance for protecting investors' interests.On the basis of reviewing the research on earnings management behavior in private placement and related literatures on wealth effect after private placement,this paper firstly studies earnings management behavior of listed companies before private placement in 2014.By selecting paired samples,T-test of sample mean and multiple regression analysis,it is found that private placement companies have positive effects in the year of private placement and the year before private placement.The earnings management behavior of listed companies shows that the listed companies have motivation to manage earnings upwards before directional issuance from the dual reasons of wealth growth of major shareholders and raising more funds.It also verifies that the degree of earnings management of listed companies is positively related to the size of the company and the rate of return on assets,and negatively related to the rate of assets and liabilities.On this basis,this paper continues to study the impact of earnings management on investors' long-term wealth effect.Taking 454 A-share listed companies in China as samples,the key variables affecting investors' long-term wealth effect are selected.Through multiple regression analysis,it is found that the more serious earnings management of listed companies,the lower the long-term purchase and holding returns of stocks.Listed companies adjust accrued profits before directional issuance,conceal real earnings information,and achieve the purpose of issuing shares to raise funds.After issuance,accrued profits are returned to make stock returns decline.Finally,investor attention is introduced as a moderating variable.Through multiple regression analysis,it is found that investor attention and earnings management multiplier are significantly positively correlated with long-term wealth effect.It shows that the more investors pay attention to earnings management,the less negative impact it has on long-term wealth effect;investors' attention will dominate their stock trading behavior;insufficient attention to stock information will cause investors to be unable to fully interpret the real earnings information before directional issuance,stock prices can not truly reflect the existing information,and give listed companies the opportunity to manipulate earnings,so the more investments they make.The paperalso verifies that the size of issuance is positively correlated with the long-term wealth effect;the total return on assets is positively correlated with the long-term wealth effect;the asset-liability ratio is positively correlated with the long-term wealth effect;and whether to issue to large shareholders is negatively correlated with the long-term wealth effect.Finally,combined with the conclusions of the previous study,the paper puts forward that the securities regulatory authorities should improve laws and regulations,actively introduce institutional investors to participate in directional issuance,strengthen the supervision of earnings management of listed companies,broaden the channels of information sharing in capital market,guide small and medium-sized investors to make investment decisions,and protect investors' interests.