A Empirical Study of the Effects of Equity Structure on Earning Quality in Electric Power Industry

This paper uses the data of listed companies in electric power industry in 2007 to analyze effects of Equity Structure on Earning Quality. A comprehensive scoring for earnings quality was made by processing factor analysis, and then a correlation analysis and regression analysis for the relevant indicators of Equity Structure was performed and the results were scored. Conclusions are drawn as follows: In electric power industry, the shareholding ratio of the largest shareholder has no significant effects on earning quality; The degree of the balance of shares is not related to earning quality; Shareholding ratio of the tradable shares has a linear correlation with the earning quality which means with the increase of the proportion holding of tradable shares, earnings quality has a significant linear augment.