Social insurance and earnings management: Too rich to be good

Frontiers in Psychology

article

Yunxia Bai¹  Bofu Zhang¹ 

[1] School of Economics and Management, Tongji University

关键词: social insurance contributions;    Earnings management;    Free cash flow;    Corporate social responsibility;    dual collecting system;    social security agency;    tax bureau;    Corporate Governance;   

DOI  :  10.3389/fpsyg.2022.934516

学科分类：社会科学、人文和艺术（综合）

来源: Frontiers

【 摘 要 】

We examine the relationship between social insurance contributions and earnings management for publicly listed firms in China. Our empirical results show that the social insurance contributions burden significantly reduces the degree of earnings management by reducing the level of free cash flow. Additionally, the negative relation between social insurance contributions burden and earnings management is more pronounced when the internal and external social insurance pressures are high and when the firms are large non-state-owned enterprises. We also discuss the heterogeneity among firms for different financing constraints, external financing environment, regional marketization, and internal and external corporate governance. Finally, we further find that under the dual collecting system, although the social security administration is a better collecting agency, the local tax bureau acting with full responsibility is more effective than the collecting system.

【 授权许可】

CC BY