Abstract:
Using the data set of listed firms from 2006 to 2015 in China, this research examines the impact of Social Security Fund (SSF) on Corporate China's earnings quality. We use financial restatement as a direct measure of bad earnings quality. Overall, we find that being held by SSF is associated with less financial restatements and credit it to increased corporate earnings quality. This effect is more pronounced in state-owned enterprises, firms with weaker corporate governance practice and firms from regions with less developed markets mechanism. After controlling for possible endogeneity issues with a difference-in-differences approach and some placebo tests, the above results still hold robust. We further find that a less occupation of fund and more institutions' site visits are among possible underlying channels through which Social Security Fund affects corporate earnings quality and thus firms' financial restatement. This research has obvious yet important policy implications, which calls for the monitoring from more powerful large minority shareholders, including China's Social Security Fund, to increase the governance standard for China's listed firms.
李春涛, 薛原, 惠丽丽. 社保基金持股与企业盈余质量:A股上市公司的证据[J]. 金融研究, 2018, 457(7): 124-142.
LI Chuntao, XUE Yuan, HUI Lili. Social Security Fund and Corporate Earnings Quality:Evidence from China. Journal of Financial Research, 2018, 457(7): 124-142.
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