Research On The Relationship Between Performance Decline And Listed Corporation Fraud

Stable capital market order is the cornerstone for the survival and development of listed companies.To establish a high standard and high-quality market system is not only advocated by securities market regulators,but also the common interests of the majority of investors,which is a direct embodiment of the law of capital market development.China’s securities market regulators have always maintained a high pressure on listed companies’ violations and played an irreplaceable role in supervising the normal operation of the capital market.However,due to the lure of excess and illegal earnings,hidden and diversified means of violation,imperfect legal system construction and the shareholding structure in China,the listed companies’ illegal behaviors are repeatedly prohibited and become more and more intense.How to warn and prevent the occurrence of irregularities and better regulate the behavior of listed companies has not only become a top priority to gradually build a high standard market system,but also a hot topic in the field of corporate governance research.Although scholars have analyzed the influence mechanism of listed companies’ violations from the perspectives of external supervision and internal governance,the discussion and exploration of the relationship between performance decline and listed companies’ violations from the perspective of performance feedback is still insufficient.Therefore,in order to further enrich and improve existing studies,this paper takes A-share listed companies in Shanghai and Shenzhen from 2010 to 2020 as the research object,focusing on the impact mechanism of performance decline on listed companies’ violations,in an attempt to reveal and test the violation tendency and motivation of companies with negative performance feedback in real decision-making situations.On this basis,we introduce analysts’ attention and managers’ overconfidence as moderating variables to analyze the weighting effect of external supervision mechanism and managers’ characteristics on the relationship between performance decline and listed companies’ violations.At the same time,this paper explores part of the transmission path of performance decline to listed companies’ violations from the perspective of information and principalagent respectively,and further discusses and verifies the negative effects of listed companies’ violations revealed by inspection.Based on theoretical analysis and empirical test,this paper finds that:(1)Performance decline has a positive impact on listed companies’ violations;(2)Analysts’ attention has played its due external supervision effect and weakened the positive impact of declining performance on listed companies’ violations;(3)Managers’ overconfidence strengthens managers’ risk-taking tendency and positively moderates the relationship between performance decline and listed companies’ illegal behaviors;(4)The test of intermediary mechanism shows that internal agency cost and corporate transparency are part of the action path of performance decline affecting listed companies’ violations;(5)Further research finds that when listed companies’ violations are revealed by inspection,the risk of stock price collapse will increase,thus disrupting the normal order of capital market.Gradually improve the quality of China’s capital market,the background of construction of high standard market system in our country is in a high quality of the market economy development steady transition stage of the research conclusion of this article to prevent violations of listed companies to provide a new perspective,and to guard against poor management of the listed company case to provide theoretical basis for negative changes in behavior,At the same time,it provides empirical evidence for the rationality of major illegal delisting advocated by the "New Regulations on Supervision",which has certain reference significance for stabilizing and improving the socialist market order in China.