Can group operation mitigate corporate leverage manipulation: an analysis of A-share listed companies

Previous research primarily focuses on analysing the motives and influencing factors behind corporate leverage manipulation while overlooking strategies to mitigate it. This paper addresses this gap by investigating the impact of conglomerate operations on corporate leverage manipulation, utilizing leverage manipulation data from Chinese Shanghai and Shenzhen A-share firms spanning from 2010 to 2022. The findings indicate that conglomerate operations can curb corporate leverage manipulation, a conclusion validated through robustness tests. Heterogeneity analysis reveals that this effect is particularly pronounced among non-state-owned enterprises, firms facing high financing constraints. This paper offers valuable insights for corporate governance in China's 'new normal' and serves as a significant reference for other developing countries.