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| Do Blockholders Have Choice Preference to Different Earnings Indexes? |
| TANG Yue-Jun |
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Abstract As the core of corporate governance in transition economy, mechanism of blockholders counterbalance has important impacts on earnings management or profit manipulation. In this paper, we select earnings per share (EPS) and operating profit margin (OPE) to represent two kinds of earning indices, then according to empirical evidences from Chinese stock market from 2001 to 2004 we find that: (1) shareholding percent of the controlling shareholder (the largest shareholder) is positively associated with EPS while negatively associated with OPE; (2) shareholding percent of other blockholders and counterbalance degrees (or combined counterbalance degrees) to the largest shareholder (the top 2 shareholders) is negatively associated EPS while positively associated with OPE. These empirical findings indicate that different blockholders have choice preference to different earnings indices: (1) The controlling shareholders prefer to earnings indices which investors pay great attention to and which
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Received: 02 July 2008
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Corresponding Authors:
TANG Yue-Jun
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2008, Vol. 1 
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