The threat is a common game between stakeholders, forcing the other to make a concession by exerting pressure, and then affecting the equilibrium strategy of the game. In corporate governance, the exit threat is an important means for large shareholders to achieve their governance objectives. However, due to the difficulty of direct observation, the academic community failed to give enough attention. In this paper, the concept of social psychology is introduced into the framework of corporate governance research. 　　The exit threat is a frontier research field in the international finance and accounting circles recently. The literature finds that the credible exit threat can alleviate the agency problem between shareholders and the managing hierarchy （Hope, et al., 2017; Edmans and Holderness, 2017）. Can the exit threat governance effect based on western capital market experience be applied to emerging capital market countries? This problem remains to be further tested. In recent years, China’s capital market has developed rapidly, but large shareholders tunneling listed companies and infringing on the interests of small and medium shareholders emerge endlessly. In these events, the external majority shareholder, who should have acted as a " supervisor”, plays the role of " collusion”. This leads to the question: will the external majority shareholder conspire with the controlling shareholder and management by using the exit threat? It is necessary to verify the " governance hypothesis” and " collusion hypothesis” that may exist in the exit threat. 　　Based on 17 080 observation samples from 2007-2015 years’ Shanghai and Shenzhen A shares, this paper examines the " governance hypothesis” and " conspiracy hypothesis” for the outside blockholders’ exit threat. We also analyze the heterogeneity characteristics of the exit threat governance effect based on the short selling mechanism. The study finds that: the " governance hypothesis” of the outside blockholders’ exit threat is established, that is, the exit threat can effectively play the role of earnings management, and one standard deviation plus in the exit threat will reduce 7.143% of accrued earnings management and 4.380% of real earnings management. It further finds that: the governance role of the exit threat is more significant in corporations with short selling, higher stock price sensitivity and higher market value management sensitivity. The findings confirm that the exit threat will have a substantial impact on corporate decision making, and reveal the path of capital market pressure transmitting to the real economy, which provides a new idea for corporate governance improvement.　　The contributions of this paper are mainly reflected in two aspects: First, it enriches and develops the literature in the field of corporate governance. From the perspective of social psychology, this paper puts the exit threat into the research framework of corporate governance, analyzes the governance effect of the exit threat to the earnings management, and provides empirical evidence from the emerging capital market countries for the exit threat affecting the enterprise micro behavior. Dou, et al. （2016） think that large shareholders’ exit threat can improve the quality of the financial information of enterprises. This study expands the theoretical literature of the " Shareholder Activism” of the Chicago school, and confirms that the governance effect of the exit threat also exists in the emerging capital market countries. From the perspective of earnings management, this paper examines the governance effect of the exit threat of large shareholders on earnings management, which is a beneficial supplement to and expansion of Jiang’s （2015） literature, and also provides new evidence for the hot research of the recent international academic circles on the exit threat and the company’s financial relations. Second, it reveals the potential mechanism of the exit threat affecting corporate governance. The existing exit threat literature is more concerned about the impact of the exit threat on the decision or behavior of enterprises, and is not concerned about the potential mechanism of the exit threat affecting corporate governance. This paper finds that the governance effect of the exit threat is more significant when stocks or managers or controlling shareholders are sensitive to the stock price. This shows that only when the decision-maker cares about the stock price, the exit threat can really play a role, thus clarifying the channel that the exit threat affects corporate governance and financial decision-making.