Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments August 2003 erstellt
Beschreibung:
This paper hypothesizes that earnings management in China's listed companies is mainly induced by controlling owners' tunneling activity. We conduct our analyses in two stages. In the first stage, we relate our analyses to prior research on Chinese listed companies which has documented their strong incentives to manage earnings in order to meet certain return on equity (ROE) thresholds. We identify tunneling evidence in two scenarios where such practice has been most conspicuous. In the second stage, we examine systematic differences in earnings management across the universe of China's listed companies during 1999-2001. We provide cross-sectional and time-series evidence showing that firms with higher corporate governance levels tend to have less earnings management. Our empirical findings although not being able to completely exclude other theories, strongly suggest that agency conflicts between controlling shareholders and outside investors are the main stimuli of earnings management in China's listed companies