Proceedings of the 2022 International Conference on Bigdata Blockchain and Economy Management (ICBBEM 2022)

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How to Balance Enterprise Financialization and Earnings Management?——From the Perspective of External Governance of Institutional Investors

Authors
Huijiao Duan1, *
1School of Economics and Management, Beijing Jiaotong University, Beijing, China
*Corresponding author. Email: 20120652@bjtu.edu.cn
Corresponding Author
Huijiao Duan
Available Online 20 December 2022.
DOI
10.2991/978-94-6463-030-5_106How to use a DOI?
Keywords
Corporate Financialization; Earnings Management; Institutional Investors; External Governance
Abstract

The excessive financialization of real enterprises has a negative impact on enterprise innovation, unbalanced economic development and financial stability. This paper studies the tradeoff logic between corporate financialization and earnings management from the perspective of external governance of institutional investors. It is found that strategic institutional investors may reduce accrued earnings management and real activity earnings management of listed companies by allocating financial assets. In addition, strategic institutional investors are for the dual purposes of obtaining short-term earnings and restraining earnings management of listed companies, while financial institutional investors may be mainly for the purpose of obtaining short-term earnings. Further research shows that when strategic institutional investors participate in corporate governance, they can reduce the earnings management of their real activities by supervising the abnormal production activities of listed companies. The conclusion of this paper shows that the external effects of institutional investors are reflected in corporate finance and earnings management. By paying attention to institutional investors, we can give better play to their external governance effects and improve the quality of listed companies.

Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2022 International Conference on Bigdata Blockchain and Economy Management (ICBBEM 2022)
Series
Atlantis Highlights in Intelligent Systems
Publication Date
20 December 2022
ISBN
978-94-6463-030-5
ISSN
2589-4919
DOI
10.2991/978-94-6463-030-5_106How to use a DOI?
Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Huijiao Duan
PY  - 2022
DA  - 2022/12/20
TI  - How to Balance Enterprise Financialization and Earnings Management?——From the Perspective of External Governance of Institutional Investors
BT  - Proceedings of the 2022 International Conference on Bigdata Blockchain and Economy Management (ICBBEM 2022)
PB  - Atlantis Press
SP  - 1072
EP  - 1079
SN  - 2589-4919
UR  - https://doi.org/10.2991/978-94-6463-030-5_106
DO  - 10.2991/978-94-6463-030-5_106
ID  - Duan2022
ER  -