Corporate Governance and Earning Management:Empirical Evidence from China's Listed Companies

As a part of agency cost,earning management can infringe on investors' interests.Employing the adjusted Jones model and the panel data of CCGINK over 2003-2005,this paper estimates the earning management of China's listed companies and empirically analyses the relationship between corporate governance and earning management.The results indicate that the improvement of corporate governance can significantly undermine its earning management.In addition,such an effect is mainly due to the positive results of corporate governance mechanisms such as board of directors,board of supervisors,information disclosure and stakeholders.Regressions of two sub-samples prove the robustness of the results.