The Impact of the Negative List System for Market Access on Real Earnings Management: Evidence from a Multi-period DID Quasi-natural Experiment
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Keywords
negative list system for market access, real earnings management, multi-period difference-in-differences, competition governance
Abstract
This paper exploits the phased pilot implementation of the Negative List System for Market Access as a quasi-natural experiment. Using data on A-share listed firms in the Shanghai and Shenzhen stock exchanges from 2013 to 2019, we employ a multi-period difference-in-differences (DID) approach to examine the impact of this system on firms’ real earnings management. The results show that the Negative List System for Market Access significantly reduces the level of real earnings management. This finding remains robust after a series of robustness checks, including propensity score matching (PSM) and entropy balancing. Heterogeneity analysis indicates that the policy effect is more pronounced in firms with larger board size, while it is relatively weakened in firms with CEO duality, abundant cash flows, and strong profitability. From the perspective of corporate financial behavior, this study reveals the micro-level governance effects of market access reform and provides empirical evidence for deepening the “streamlining administration, delegating power, strengthening regulation, and improving services” reform and optimizing the business environment.
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