The Impact of Equity Governance and Earnings Management on Organizational Resilience: Evidence from“Specialized and New Enterprises”

Abstract

Abstract This study focuses on “Specialized and New Enterprises” to explore the mechanisms through which equity governance and earnings management affect their organizational resilience. It also examines the mediating role of compliance and risk control and the moderating role of firm growth capability. Employing a multiple case study methodology, three A-share listed SNEs were selected as samples. Data were collected from multiple sources, including annual reports and interviews, and analyzed using grounded theory. The findings are as follows: (1) Equity governance structure is a key driver for the investment in and effectiveness of compliance and risk control in SNEs. (2) The quality of earnings management significantly influences the substantive effectiveness of compliance and risk control, which in turn affects organizational resilience. (3) Compliance and risk control play a significant mediating role in the pathway from “effective equity governance and high-quality earnings information” to “organizational resilience”.(4) Firm growth capability positively moderates the aforementioned impact pathways, with high-growth firms being able to more effectively translate governance advantages and compliance outcomes into organizational resilience. This research provides theoretical insights into the micro-foundations of resilience building in SNEs and offers practical implications for firms to optimize governance, strengthen risk control, and enhance resilience.