Earnings Management,Creditor Protection and Debt Default Rates——Evidence from Security Market in China

This paper selects these companies which are obviously with performance manipulating suspects as study samples.By comparing the loan default rates of these special companies with that of adjacent interval companies,the authors find that the loan default rates of these suspected companies does not have significant differences with left adjacent interval companies but significant larger than that of right adjacent interval companies.It manifests that Chinese banks can not effectively discern companies' manipulating behaviors,and this situation brings unreasonable resource allocation and non-performing loans.