Earnings Management and Capital Resource Allocation: Evidence from China's Accounting-Based Regulation of Rights Issues
研究中国1996-1998年配股政策（要求前三年ROE不低于10%）如何引发盈余管理，发现公司通过非经常性损益达标，但后续业绩较差，削弱了监管引导资本流向优质企业的效果。
From 1996 to 1998, listed companies in China were required to achieve a minimum return on equity (ROE) of 10 percent in each of the previous three years before they could apply for permission to issue additional shares. As a result of this rule, there was a heavy concentration of ROEs in the area just above 10 percent. We show that the Chinese regulators appear to have scrutinized firms using excess amounts of nonoperating income to reach the 10 percent hurdle. In addition, their ability to do so seems to have improved over time, which allows them to be better able to identify firms that subsequently performed better. However, many firms were still able to gain rights issue approval through excess nonoperating income. We show that these firms subsequently underperformed other approved firms that did not use the same practice, indicating that the Chinese regulators' objective of guiding capital resources toward the well-performing sectors is partially compromised by earnings management.