TITLE:
Equities Incentive, Informativeness of Stock Price and Earnings Management: Based on the Chinese A-Share Listed Companies
AUTHORS:
Qifan Zhong
KEYWORDS:
Equities Incentive, Informativeness of Stock Price, Earnings Management
JOURNAL NAME:
Modern Economy,
Vol.7 No.3,
March
22,
2016
ABSTRACT: Equities incentive is
more and more frequently used for motivating management among Chinese listed
companies, but whether it will degrade informativeness of stock price, thus reduce
the efficiency of capital allocation in security market remains to be verified.
This article used the data of A-share listed companies in China from 2010-2014,
deployed an empirical research to study the relationship between equities
incentive and informativeness of stock price, considering earnings management
as an intermediary variable. According to the analysis results, we found that
higher level of equities incentive tended to degrade the level of
informativeness of stock price, and the earnings management was not an
effective intermediary variable, which meant the earnings management resulted
from equities incentive was less likely to affect informativeness of stock
price.