Earning quality, Venture capital and Firm value

Jiujin Li^1,2, Fusheng Wang¹, Chang Xu²

COMPUTER MODELLING & NEW TECHNOLOGIES 2013 17(5C) 242-247

¹School of Management, Harbin Institute of Technology, P.R.China, 150006
²Institute of Petroleum Economics and Management, Northeast Petroleum University, P.R.China, 163318

In order to study the impact of earning quality and venture capital on firm value for small and medium-sized enterprises, the paper selects data of small and medium-sized enterprises from 2009 to 2012 in the Shenzhen stock exchange, which finds a positive correlation between earning quality and venture capital. For promotion of firm value and own reputation, the intervention of private equity investment strengthens positive correlation between accounting earning quality and venture capital. The research indicates that the less earnings management behavior exists, the higher earning quality and firm value is. In addition, the intervention of venture capital effectively inhibits earnings management behavior and improves firm value, strengthening positive correlation between earning quality and firm value. The conclusion enrichs related literature and also has an important theoretical significance and reference value for controling earnings management behavior, elevating earnings quality, optimizing the intervention of venture capital and perfecting the related systems.