Author(s)

Shuang Li

Corresponding Author

Shuang Li

Abstract

This paper empirically examines the relationship between earnings management and investment efficiency of listed companies in Shenzhen and Shanghai from 2011 to 2016 target observation period. In addition, managerial power is added as a governance factor to examine the influence of that on the relationship between earnings management and investment efficiency. The results show that earnings management and managerial power have a negative effect on investment efficiency, and managerial power can mitigate inefficient investment caused by earnings management. Further research shows that earnings management and managerial power can significantly aggravate the non-efficiency investment of manufacturing companies, but the impact on non-manufacturing companies is not obvious.

Keywords

Earnings Management, Managerial Power, Investment Efficiency