Author(s)

Zheng Li, Huang Zhe, Du Feiye

Corresponding Author

Zheng Li

Abstract

This paper attempts to study how the margin financing policy directly affects the company from a micro perspective, which affects the management's profit manipulation behavior and thus indirectly affects the efficiency of the capital market. Through empirical analysis, this paper shows that the effect of margin financing and securities lending on earnings management is not obvious in companies with high degree of marketization. On the contrary, in areas with low marketization, the effect of margin financing and securities lending on earnings management is obvious. Therefore, there are also alternative effects in financing and securities lending and external governance factors in inhibiting earnings management.

Keywords

Margin Financing and Securities Lending, Earnings Management, Governance Effectiveness