In the study of the existing differential equations, it is often considered that the central individual is homogeneous and does not take into account the fact that the same affinity network is different from the central individual with heterogeneity, and often see " Difference” and not see " Sequence”. This study is based on the Shanghai-Shenzhen A-share listed companies in 2010-2016 as the sample. It is proved that the decision-making of earnings management of listed companies in our country is affected by peer decision-making, and this peer-to-peer relationship is different. " Sequence” resulting from the heterogeneity and geographic affinity of focal enterprises plays different regulatory roles on the peer effect of earnings management. The results show that the state-owned nature of focal enterprises will restrain the positive impact of the average earnings management level of other enterprises on their earnings management decisions; while the geographic relationship between focal enterprises and the same industry group will strengthen this peer effect. According to the regulation function of " Sequence” in the study of enterprise heterogeneity grouping, we find that in state-owned enterprises, the geographic relationship between focal enterprises and the same industry group has no significant impact on the peer effect of earnings management; while in non-state-owned enterprises, the geographic relationship between focal enterprises and the same industry group will enhance this peer effect. Further analysis of the peer effect boundary of state-owned focal enterprises shows that when focal enterprises belong to the protective industry, the geographic relationship has no significant impact on the peer effect of earnings management; while when focal state-owned enterprises belong to the non-protective industry, the geographic relationship will promote the peer effect of earnings management.
The main contributions of this study are as follows: Firstly, different from the peer effect of earnings management under the chain director network studied by Chiu, et al. (2013), this study is the first time in China to explore the peer effect of earnings management from the perspective of industry relationship network. Traditional research on earnings management motivation pays too much attention to the internal factors of enterprises and seldom pays attention to the influence of external " companions” of enterprises. This conclusion enriches the literature of influencing factors of earnings management and helps scholars to further open the " black box” of earnings management behavior. Secondly, although domestic financial academia has begun to pay much attention to the peer effect in the process of financial decision-making, there are few studies on the mechanism of the difference pattern in the peer effect of financial decision-making based on the perspective of Chinese local characteristics. This study provides a new analytical perspective for the study of the peer effect of financial decision-making. Thirdly, the traditional difference pattern generally considers the central individual, while this study relaxes this hypothesis, studies the influence of the " Sequence” of the same industry relationship network on different types of enterprise individuals, and expands and enriches the existing research on the differential order theory.