Chinese property companies manipulate earnings, misleading investors and impacting markets.
The article examines how Chinese property companies manipulate their earnings to meet certain requirements or avoid being removed from the stock market. The study shows that these companies often use tactics like inflating inventory or current liabilities to reach short-term financial goals. Companies with concentrated ownership are more likely to engage in earnings management, while having outside shareholders and independent directors can reduce this behavior. The research covers data from 2001 to 2008 and sheds light on the incentives and methods used by Chinese listed property companies to manage their earnings.