| Summary: | 碩士 === 國立政治大學 === 會計學系 === 106 === Nowadays, businesses work in more and more complicated way. Business owners can make their businesses stronger by issuing new shares；also, business owners can improve their operating performance by capital reduction when they are in difficult operating situation. Formal capital reduction, also called capital reduction for making up losses. After capital reduction for making up losses, businesses usually show better operating performance, because businesses management only adjust their account on the book. This study explores whether the operating performance of businesses will get improved after capital reduction for making up losses, and whether management will do more earnings management behaviors that lead to improvement of operating performance.
The main findings are summarized as follows：In the first year after capital reduction for making up losses, management do more earnings management behaviors to make operating performance better indeed. In the second year after capital reduction for making up losses, although earnings management behaviors are significantly more than before, this research does not show that operating performances are significantly better than before, so we still can not include that business management will make their operating performance better through manipulating surplus. Further, this research divides the sample of all make-up losses companies into two categories：pure reduction companies and companies that issue new shares after capital reduction. And then test this two types of companies separately. Also, according to this research, we can not include that business management will make their operating performance better through manipulating surplus.
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