Measuring the Management of Cash Flows from Operating Activities-Evidence from Chinese Capital Markets

摘要

Based on the structure of statement of cash flow, this paper develops a model to measure the management of cash flows from operating activities (CFO). We verify the model's effectiveness for the sample consists of 6146 firm-years over 1998~2006 of Chinese listed companies. We find that those companies with the incentive of reporting positive CFO or transcending CFO in previous year have much higher magnitude of CFO management. The results indicate that there exists the phenomenon of CFO management for Chinese listed companies, and these management activities are motivated by different incentives.