| In recent years,earnings management scandals in China’s capital market have occurred frequently,which has aroused the attention of regulators and academic circles to earnings management.The CSRC and SASAC announced a series of working regulations on the setting of performance conditions in equity incentive in 2020.The impact of these Regulations on management earnings management has attracted much attention from all walks of life.In this context,it is of great significance to study the changes of earnings management behavior of listed companies and the impact path of performance completion rate on earnings management behavior after the implementation of equity incentive with performance conditions.Firstly,taking the Shanghai and Shenzhen A-share listed companies that exercised equity incentive from 2007 to 2020 as a sample,this paper manually sorted out the exercise performance conditions in the equity incentive plan of each company,and calculated the "performance completion rate" index combined with the actual performance of the company.Using panel data fixed effect regression and sample distribution,this paper investigates the relationship between equity incentive and real earnings management,accrued earnings management and classified earnings manipulation under different performance completion rates.Then,the instrumental variable method,PSM and progressive did model are used to deal with the endogenous problem,and its robustness is tested by changing the sample interval.Secondly,it explores the heterogeneity of the impact of performance completion rate on earnings management from the nature of corporate property rights.Finally,it explores the mechanism of ownership structure,cash dividend and external supervision in the impact of equity incentive on earnings management.The results show that after the exercise of equity incentive,the real earnings management of the company decreases significantly,and the accrued earnings management and classified transfer earnings management increase significantly.When the performance completion rate is less than 100%,there is no significant change in the three earnings management behaviors of the company.When the performance completion rate is 100%-200%,the company’s real earnings management decreases significantly and the classified manipulation increases significantly.When the performance completion rate exceeds 200%,the company’s real earnings management increases significantly and the classified transfer earnings management decreases significantly,which shows that equity incentive has a differential impact on the company’s earnings management behavior;From the perspective of the nature of corporate property rights,equity incentive only has a positive impact on the classified earnings management of executives in non-state-owned enterprises,while there is a small amount of positive accrued earnings management in state-owned enterprises;There is no significant correlation between the equity incentive of central enterprises and the three earnings management behaviors.Further mechanism study found that the change of management shareholding ratio played a shielding effect in the relationship between the two;However,the reduction of management’s holdings plays an amplifying role in the relationship between the two;Ownership concentration has partial mediating effect in the influence process of equity incentive and real earnings management;The company’s cash dividends play a strengthening role.In the external supervision environment,only the audit firms with high analysis and rating can form strong constraints on the earnings management of enterprises.Finally,based on the above research conclusions,this paper puts forward suggestions on improving financial supervision and identifying earnings management risks for relevant stakeholders such as supervision and investment project management departments. |
