Author(s)

Yue Teng, Yang Bai, Xiaoli Zhang

Corresponding Author

Yue Teng

Abstract

For a long time, earnings management has been a persistent problem in China's capital market that is difficult to eradicate. Listed companies can carry out earnings management through the choice of accounting policies and the application of accounting estimates, the use of connected transactions and the support of local governments to manipulate accounting earnings, the use of debt restructuring, and the use of capitalization of R&D expenditures, which may mislead investors' decisions, undermine the effectiveness of the capital market, reduce the efficiency of resource allocation, and impede the effective operation of social and economic mechanisms. There are many reasons for earnings management, one of which is the shareholding structure of the company. For this reason, the introduction of institutional investors to check the power of major shareholders has become an institutional option that can effectively reduce corporate earnings management behavior. This paper investigates the direct impact of shareholding structure on real earnings management from the perspective of social network.

Keywords

Social network perspective, Shareholding structure, Real earnings management