An Empirical Study on the Effects of Equity Incentive of the Listed Corporations in the SME Board of China —An Empirical Analysis Based on the View of Earnings Management

Lixin  Xu; Wenqin  Cui

doi:10.4236/ti.2014.51004

TI Vol.5 No.1 , February 2014

An Empirical Study on the Effects of Equity Incentive of the Listed Corporations in the SME Board of China —An Empirical Analysis Based on the View of Earnings Management

Lixin Xu, Wenqin Cui

Abstract: Currently, most researches are focusing on Shanghai & Shenzhen exchange, and few researches have been done on the SME board. Besides, while studying the effect of equity incentive, most of the researchers have ignored the earnings management triggered by stock ownership incentive. This paper takes the SME board companies which have implemented stock ownership incentive as the research object. We have used earnings management to modify the company performance and carried out an empirical research to study the effect of stock ownership incentive. Our result shows that without earnings management to modify the company performance, stock ownership incentive is positively related to company performance. Taking the earnings management into account, the positive correlation relationship between stock ownership incentive and company performance will be weakened, and stock ownership incentive will stimulate earnings management.

Keywords: Equity Incentive; SME Board; Company Performance; Earnings Management

Cite this paper: L. Xu and W. Cui, "An Empirical Study on the Effects of Equity Incentive of the Listed Corporations in the SME Board of China
—An Empirical Analysis Based on the View of Earnings Management," Technology and Investment, Vol. 5 No. 1, 2014, pp. 26-31. doi: 10.4236/ti.2014.51004.

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