Abstract: Based on the data of A-share non-financial enterprises from 2015 to 2018 and from the perspective of real earnings management, this paper examines the governance effect of controlling shareholders' using leverage to increase their shareholdings. The results show that the controlling shareholders' leverage increased shareholdings will significantly reduce the company's real earnings management, and the ratio, amount and number of shares of controlling shareholders' leverage increased holdings will significantly reduce the company's real earnings management, indicating that the controlling shareholders' leverage increased holdings has obvious inhibiting effects on the company's real earnings management, thereby improving the quality of the earnings of the listed companies. In addition, the controlling shareholders' leverage increased shareholding behavior reduces the company's real earnings management mainly by restraining the company's sales control and production control. At the same time, in non-state-owned enterprises and companies with better internal governance environment and better external institutional environment, the controlling shareholders' leverage increased shareholdings has a stronger inhibitory effect on the company's real earnings management. The research conclusions provide empirical evidences for the protection of the rights and interests of the investors and the stabilization of the capital markets.

Key words: controlling shareholder, leverage increased holdings, real earnings management