Examining the behaviour of Chinese high-tech firms throughout their lifecycle of certification: A microeconomic perspective

SungMan Yoon (), Ying Cui () and JungHwa Suh ()

International Journal of Applied Economics, Finance and Accounting, 2024, vol. 20, issue 1, 11-20

Abstract: This study examines whether the behaviour of high-tech firms (earnings management) differs between the period immediately before certification and the period during certification. Additionally, the influence of the Chinese government's equity ownership on the earnings management tendencies of high-tech firms is examined. This study is focused on Chinese companies that are listed on the Chinese stock exchange from 2009 to 2020. Empirical analyses, including descriptive statistics, correlation analysis, and regression analysis, were conducted to obtain the results. The two main findings are as follows: First, during the certification period, high-tech firms tend to engage in earnings-minimising activities, due to the continuous supervision and management required to meet and maintain the certification requirements imposed by the Chinese government. Second, firms with higher equity ownership by the Chinese government tend to engage in more earnings management immediately before achieving high-tech firm certification than during the certification period. This behaviour can be attributed to the differential taxation of high-tech firms and the Chinese government's intensive supervision, management, and regulation of firms. This study contributes to the literature on the impact of government supervision, management, and/or regulations on the level of earnings management activities by high-tech firms. It examines the effect of government ownership of firms and the corporate structure of high-tech firms on earnings management. It also provides foreign investors with information about how high-tech firms and the Chinese government behave in terms of certification.

Keywords: Certification; Differential taxation; Earnings management; Government regulation; High-Tech firms. (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://onlineacademicpress.com/index.php/IJAEFA/article/view/1873/1074 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oap:ijaefa:v:20:y:2024:i:1:p:11-20:id:1873

Access Statistics for this article

More articles in International Journal of Applied Economics, Finance and Accounting from Online Academic Press
Bibliographic data for series maintained by Heather Rothman ().