Proceedings of the 4th International Conference on Economic Management and Big Data Applications, ICEMBDA 2023, October 27–29, 2023, Tianjin, China

Research Article

Research on the Impact of Earnings Management of Listed Companies in China on Inefficient Investment

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  • @INPROCEEDINGS{10.4108/eai.27-10-2023.2341972,
        author={Guangqiang  Han and Chengyuan  Huang},
        title={Research on the Impact of Earnings Management of Listed Companies in China on Inefficient Investment},
        proceedings={Proceedings of the 4th International Conference on Economic Management and Big Data Applications, ICEMBDA 2023, October 27--29, 2023, Tianjin, China},
        publisher={EAI},
        proceedings_a={ICEMBDA},
        year={2024},
        month={1},
        keywords={earnings management; inefficient investment; over investment; under investment},
        doi={10.4108/eai.27-10-2023.2341972}
    }
    
  • Guangqiang Han
    Chengyuan Huang
    Year: 2024
    Research on the Impact of Earnings Management of Listed Companies in China on Inefficient Investment
    ICEMBDA
    EAI
    DOI: 10.4108/eai.27-10-2023.2341972
Guangqiang Han1, Chengyuan Huang1,*
  • 1: The College of Economics Bohai University
*Contact email: 1669712653@qq.com

Abstract

Appropriate investment is very important to expand the scale and increase the value of the enterprise, otherwise it will cause adverse effects on the enterprise. As one of the important information to evaluate the enterprise, the degree of earnings management will bring some information problems to the enterprise, which will lead the decision-makers to make inappropriate investment decisions. This paper analyzes the hypothesis from the principal-agent problem and the information asymmetry problem, and creates regression models between the degree of earnings management and inefficient investment, over investment, and under investment.The results show that: firstly, earnings management behavior of listed companies has a positive impact on inefficient investment; Secondly, through further grouping, we find that for the enterprises with over investment tendency, the earnings management has the forward influence on over investment; For the enterprises with the tendency of under investment, the earnings management also has the forward impact on under investment.