Split share structure reform and earnings management: evidence from China

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aut.relation.endpage127
aut.relation.issue1
aut.relation.pages8
aut.relation.startpage120
aut.relation.volume28
aut.researcherJiang, Haiyan
dc.contributor.authorJiang, H
dc.contributor.authorHabib, A
dc.contributor.editorSale, JT
dc.contributor.editorReckers, MJ
dc.date.accessioned2012-10-02T22:12:54Z
dc.date.accessioned2012-10-02T22:13:12Z
dc.date.available2012-10-02T22:12:54Z
dc.date.available2012-10-02T22:13:12Z
dc.date.copyright2012-01-20
dc.date.issued2012-01-20
dc.description.abstractThis paper investigates the impact of split-share structure reform on earnings management in China. A unique institutional feature of China was the co-existence of two types of share that endowed all shareholders with equal voting and cash flow rights but different tradability. This split-share structure significantly constrained the tradability of shares that led the Chinese Securities Regulatory Commission to make it mandatory for the conversion of non-tradable shares into tradable shares from 2006 onwards. We investigate whether such a conversion has any effect on information quality through reduced earnings manipulation. We specifically examine the incentives for earnings management during the reform-transition period. A unique feature of the split-share reform has been the requirement for non-tradable share holders to compensate the tradable share holders. We argue that the rational response from the non-tradable share holders would be to pay a lower consideration to tradable share holders by portraying a favorable picture through income-increasing earnings management. We also test for the effect of an increase in tradable shares on earnings management during the reform-transition and post-reform period.
dc.identifier.citationAdvances in Accounting Incorporating Advances in International Accounting, vol.28(1), pp.120 - 127 (8)
dc.identifier.doi10.1016/j.adiac.2012.04.001
dc.identifier.issn0882-6110
dc.identifier.urihttps://hdl.handle.net/10292/4625
dc.languageEnglish
dc.publisherElsevier Ltd.
dc.relation.replaceshttp://hdl.handle.net/10292/4624
dc.relation.replaces10292/4624
dc.rightsCopyright © 2012 Elsevier Ltd. All rights reserved. This is the author’s version of a work that was accepted for publication in (see Citation). Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. The definitive version was published in (see Citation). The original publication is available at (see Publisher's Version).
dc.rights.accessrightsOpenAccess
dc.subjectSplit-share reform
dc.subjectEarnings management
dc.subjectChina
dc.subjectTradable shares
dc.titleSplit share structure reform and earnings management: evidence from China
dc.typeJournal Article
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