The Influence Of Earnings Management On Investment Efficiency

Investment is one of the most important business activities of an enterprise.Investment means the effective allocation of resources.Efficient investment can not only improve the efficiency of production and operation,but also increase the value of the enterprise and ensure the interests of shareholders.So it is very important to improve the efficiency of investment,but in fact,there are always problems of over investment or under investment.Earnings management behavior is very common in China's market.It is generally believed that enterprises will carry out positive earnings management to increase current profits,attract investors,and obtain short-term benefits regardless of long-term value.It can be seen that there is a certain relationship between earnings management behavior and enterprise investment efficiency.It is of great practical significance to study its impact on enterprise investment efficiency.Considering the market situation of our country,irrational investors account for a large part.Investor sentiment,as an embodiment of market risk,often causes stock price fluctuations,affects the external financing environment of enterprises and then affects the investment efficiency of enterprises.Secondly,managers tend to cater to investor sentiment and change investment level,which is likely to cause managers to make irrational investment.There is also a certain relationship between earnings management behavior and investor sentiment: enterprises do carry out earnings management according to different investor sentiment.The way that the management caters to the investor's sentiment has an impact on the investment efficiency itself.Therefore,it is necessary to study how earnings management will affect the investment efficiency under the regulation of investor's sentiment.In this paper,A-share listed companies in non-financial industries in Shanghai and Shenzhen from 2008 to 2018 are taken as the research objects,and panel data empirical analysis is conducted after removing the samples of abnormal lack of financial data.In terms of the choice of dependent variables,this paper divides the residual of Richardson investment efficiency model after regression into over investment and under investment according to whether it is greater than zero,and discusses the two types of investment inefficiency separately,and studies the influence of earnings management behavior on over investment and under investment respectively,as well as the regulatory role of investor sentiment in these two influences.In addition,the manipulated accruals obtained by the modified Jones model are used as earnings management indicators,and investor sentiment momentum indicators are used as adjustment variables.Seven control variables are added,including enterprise scale,asset liability ratio,free cash flow,asset turnover ratio,asset return ratio,management expense ratio and large shareholders' occupation ratio.Regression analysis is carried out after controlling the year and industry.The results show that: the behavior of earnings management is negatively correlated with over investment,the strengthening of positive earnings management or the weakening of negative earnings management can restrain over investment,the weakening of positive earnings management or the strengthening of negative earnings management can aggravate over investment,investor sentiment plays a negative role in this mechanism,and the rising of investor sentiment can weaken or even reverse this negative correlation The negative correlation is strengthened by the low investor sentiment.The behavior of earnings management is positively correlated with the lack of investment.The strengthening of positive earnings management or the weakening of negative earnings management aggravates the lack of investment.The weakening of positive earnings management or the strengthening of negative earnings management weakens the lack of investment.Investor sentiment plays a negative regulatory role in this mechanism The positive correlation can be weakened or even reversed by the high of,and strengthened by the low of investor sentiment.