Abstract
Based on the context of the implementation of China's comprehensive deleveraging policy, this study explores the impact of firm strategic differentiation on the emergence of leverage manipulation behavior. The A-share listed firms in Shanghai and Shenzhen from 2007 to 2020 were used as the research objects, and the data were processed using Stata software. The greater the degree of strategic differentiation, the higher the likelihood of firm leverage manipulation. The effect of strategic differentiation on leverage manipulation is more significant when firms are under short-term debt service pressure. Auditor industry expertise can weaken the positive relationship between strategic differentiation and firm leverage manipulation. Further results show that the degree of strategic differentiation increases the likelihood of firm leverage manipulation by increasing the degree of financing constraints of the firm. This study enriches the literature on leverage manipulation, provides empirical evidence on the economic consequences of strategic differentiation, and has important implications for the precise implementation of deleveraging policies by relevant government departments, as well as a reference for external investors' decisions.
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