An Empirical Study on Accounting Conservatism and Capital Efficiency-Empirical Evidence from Chinese A-shire Listed Companies

This paper makes a study on the relationship between accounting conservatism and investment efficiency using data of A-share companies in the stock markets of Shanghai and Shenzhen during 2007 to 2012 after the implementation of new accounting standards. The results show that accounting conservatism is positively correlated with firm investment, therefore conservative policy is helpful to improve the investment efficiency of enterprises.