Corporate governance and earnings management in the Chinese listed companies: A tunneling perspective

Liu, Qiao; Lu, Zhou

doi:10.1016/j.jcorpfin.2007.07.003

Cited by 583 publications

(434 citation statements)

References 41 publications

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“…Ding et al (2007) and Wang and Yung (2011) have found that state-owned companies manage earnings less than privately-owned companies. Conversely, Aharony et al (2000), Chen and Yuan (2004) and Liu and Lu (2007) have found that state-owned companies manage earnings more than privately-owned ones do. Recently, Capalbo, Frino, Mollica, and Palumbo (2014) have investigated Italian private companies, finding that state-owned companies manage earnings less than privately-owned ones do.…”

Section: State Ownership and Earnings Managementmentioning

confidence: 99%

“…Conversely, the second hypothesis (the "entrenchment effect") suggests that owners with significant amounts of shares have incentives to exploit their dominant position to the detriment of minority shareholders (e.g. Bebchuk, 1994;Liu & Lu, 2007;Stiglitz, 1985). As a result, ownership concentration and companies' earnings management activity is directly related (e.g.…”

Section: Ownership Concentration and Earnings Managementmentioning

confidence: 99%

“…In addition, the majority of previous studies have investigated Chinese listed companies (Aharony, Lee, & Wong, 2000;Chen & Yuan, 2004;Ding, Zhang, & Zhang, 2007;Liu & Lu, 2007;Wang & Yung, 2011). Ding et al (2007) and Wang and Yung (2011) have found that state-owned companies manage earnings less than privately-owned companies.…”

Section: State Ownership and Earnings Managementmentioning

confidence: 99%

See 2 more Smart Citations

Do Ownership Structure Characteristics Affect Italian Private Companies’ Propensity to Engage in the Practices of “Earnings Minimization” and “Earnings Change Minimization”?

Poli¹

2015

IJEF

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The study aims to verify whether and how ownership structure (with specific reference to ownership concentration and identity) affects Italian private (unlisted) companies' propensity to engage in practices of "earnings minimization" and "earnings change minimization". Companies that engage in these practices have been identified following the "earnings frequency distribution" approach suggested by Burgstahler and Dichev (1997). The influence of ownership structure, together with that of a set of control variables mainly aiming to control for tax, financial, and size incentives, is tested by logit analysis models. Ownership concentration does not have a statistically significant influence. Conversely, institutional, state, and foreign ownership has a statistically significant influence. In the first and third cases, the influence is negative, in the second case the influence is positive. The study extends the current knowledge on the relationship between aspects of corporate governance and earnings management practices in private companies, especially SMEs. It also expands what is known about the earnings management practices undertaken by companies in countries, like Italy, in which a code law system is in force and accounting and tax systems are closely aligned.

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Section: State Ownership and Earnings Managementmentioning

confidence: 99%

Section: Ownership Concentration and Earnings Managementmentioning

confidence: 99%

Section: State Ownership and Earnings Managementmentioning

confidence: 99%

See 1 more Smart Citation

Do Ownership Structure Characteristics Affect Italian Private Companies’ Propensity to Engage in the Practices of “Earnings Minimization” and “Earnings Change Minimization”?

Poli¹

2015

IJEF

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“…Furthermore, some studies (Gordon et al, 2004;Kohlbeck & Mayhew, 2005) conclude that weak CG leads to a larger number of RPTs. Several studies have confirmed the use of earnings management by large numbers of listed companies in order to achieve particular levels of return on equity (ROE) (Chen & Yuan, 2004;Liu & Lu, 2007). The manipulation of the process of financial reporting to obtain private gain may be easily placed through RPTs.…”

Section: Literature Review Of Rptsmentioning

confidence: 99%

Disclosure on Related Party Transactions: Evidence from Italian Listed Companies

Bava

Trana

2016

Accounting, Economics and Law: A Convivium

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Recent shortcomings in corporate affairs, related to the bursting of the New Economy Bubble and the global financial crisis, have forced regulators to strengthen current rules introducing new bans and requirements, aimed at guaranteeing the substantial and economic fairness of related party transactions (RPTs). In 2010 rules regarding RPTs were completely reshaped by the Italian Regulatory Body for the Italian Stock Exchange (CONSOB Regulation no. 17221). One of the most important amendments regarded the change in the criteria by which RPTs are mandatorily disclosed to investors. This change replaces a selection process based on a qualitative with a quantitative approach, in order to reduce the subjectivity of this particular evaluation. This study aims to analyze the effectiveness of the disclosure of RPTs after the introduction of the new rules. Our results show that although the new rules contribute to increasing the amount of information disclosed to investors through a higher number of documents reported by companies, their percentage in relation to the overall amount is worryingly low.

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“…The overwhelming demand for rights offering forced the China Securities Regulatory Commission (CSRC) to use the return on equity (ROE) requirement to set the threshold. As a result, not only did a majority of firms manipulate earnings to meet the ROE requirement (Chen and Yuan, 2004;Haw et al, 2005;Yu, Du, and Sun, 2006;Liu and Lu, 2007), but also local governments provided subsidies to help listed firms, especially those firms largely held by local governments, to boost their ROE (Chen, Lee, and Li, 2008).…”

Section: Structural Changes In Firms' Access To the Capital Marketmentioning

confidence: 99%

Structural Changes in the Chinese Stock Market: A Review of Empirical Research

2014

China Account Financ Rev

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China’s stock market has gone through major structural changes since its inception in the early 1990s. In this survey article, we review the empirical literature published in 15 leading accounting and finance journals from 1998 to 2013 that documents these important structural changes. In analysing this literature, we focus on the ‘distinctiveness’ of the Chinese stock market compared with developed stock markets (e.g. US) and the research opportunities generated by the China setting. Key themes include China’s share issue privatisation (SIP) reforms, the political connections in privately owned companies, the characteristics of Chinese listed companies and their governance, the regulatory environment reforms in China, and the evolving role played by auditors and other information intermediaries.

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Corporate governance and earnings management in the Chinese listed companies: A tunneling perspective

Cited by 583 publications

References 41 publications

Do Ownership Structure Characteristics Affect Italian Private Companies’ Propensity to Engage in the Practices of “Earnings Minimization” and “Earnings Change Minimization”?

Do Ownership Structure Characteristics Affect Italian Private Companies’ Propensity to Engage in the Practices of “Earnings Minimization” and “Earnings Change Minimization”?

Disclosure on Related Party Transactions: Evidence from Italian Listed Companies

Structural Changes in the Chinese Stock Market: A Review of Empirical Research

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