The Study On The Impact Of Institutional Investors’ Shareholdings On Earnings Management Of Listed Companies

The formation of the modern company system is derived from the separation of the ownership and the right of control of the company.It improves the operation efficiency and brings serious principal-agent problems.Earnings management is one of the problems derived from this.Earnings management is neutral by definition.However,the excessive earnings management will lead the management to meet their own interest and damage the healthy development of the company and the capital market.Institutional investors have abundant capital,professional market analysis ability and stable value investment orientation.Institutional investors’ shareholdings and participating in governance of listed companies are considered to be able to improve the company’s equity structure,play its role of restriction and supervision,and thus reduce the level of earnings management of listed companies.Taking institutional investors as the research object,this paper studies the impact of institutional investors’ shareholding on the degree of earnings management from the two dimensions of shareholding ratio and shareholding time.This paper selects listed companies held by institutional investors in China’s A-share market in 2007-2019 as research sample,first makes a theoretical analysis of the intrinsic motivation of earnings management and the logic of institutional investors’ participation in corporate governance by using normative research,empirical research,comparative analysis and other methods,and the conclusion is that the institutional investors with a large proportion of shares in listed companies have strong motivation and supervision power to participate in the governance of listed companies.The governance structure of listed companies with shares is more perfect and has inhibitory effect on earnings management.The results show that the shareholding of institutional investors has an inhibitory effect on the real earnings management and non recurring profit and loss earnings management,and does not have an inhibitory effect on the accrued earnings management.According to the two dimensions of shareholding ratio and shareholding time of institutional investors,this paper studies the impact of institutional investment heterogeneity on earnings management.The conclusion is that stable institutional investors have an inhibitory effect on real earnings management of listed companies compared with investment institutional investors,and does not have an inhibitory effect on other methods.The following policy suggestions are put forward:Firstly,it is suggested that relevant departments establish and improve the accounting system and improve the accounting standards;Secondly,the regulatory authorities should strengthen the supervision of the regulatory authorities;Thirdly,improve the financial market system and improve the institutional basis for institutional investors to participate in the governance of listed companies;Finally,the capital market management department vigorously advocates the concept of value investment and promotes the healthy and stable development of the capital market.