Empirical research on the correlation between Real Earnings Management of state-owned enterprises and executive compensation — from the perspective of executive structural power

Abstract

This paper focuses on the impact of the executive compensation of state-owned enterprises and executive power on Real Activity Earnings Management (REM). Furthermore, this paper discusses the differences of impacts mentioned above between the central government holding enterprises and the local government holding enterprises, in order to test the impact of the government compensation regulation and the executive compensation of different types of enterprises on the enterprise accounting behavior. The empirical research shows that executive compensation can induce accountings to implement REM, which is more notable in local state-owned enterprises than in central enterprises.