scholarly journals Institutional Investors, Real Earnings Management and Cost of Equity: Evidence from Listed High-tech Firms in China

2019 ◽  
Vol 56 (14) ◽  
pp. 3490-3506 ◽  
Author(s):  
Han Gao ◽  
Zhuyi Shen ◽  
Yichen Li ◽  
Xuxin Mao ◽  
Yukun Shi
Keyword(s):  
Earnings Management ◽  
Institutional Investors ◽  
Real Earnings Management ◽  
High Tech ◽  
Cost Of Equity

scholarly journals The Influence of a Company’s Ownership Structure on Upward Real Earnings Management

2019 ◽  
Vol 12 (1) ◽  
pp. 152 ◽  
Author(s):  
Andrzej Piosik ◽  
Ewa Genge
Keyword(s):  
Earnings Management ◽  
Ownership Structure ◽  
Institutional Investors ◽  
Management Practices ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Real Earnings Management ◽  
Ownership Concentration ◽  
Managerial Ownership ◽  
Financial Transparency

Financial transparency, including transparency of transactions, is one of the pillars of sustainability. This study investigates whether a company’s ownership structure, including ownership concentration, managerial ownership, and the presence of institutional investors, affects upward real earnings management practices. The research is based on companies listed on the Warsaw Stock Exchange in Poland adapting panel data regression models. The significance and contribution to literature of the paper lies in the fact that we provide evidence that the association between the magnitude of total upward real earnings management and shareholder concentration is U-shaped, thereby indicating that there is an optimal level of ownership concentration, minimizing the magnitude of upward real earnings management and thus increasing financial transparency. Our results show the negative relationship between total upward real earnings management and managerial ownership, thereby we confirm the alignment of interest hypothesis, in terms of real earnings management. We also confirm that individual instruments of real earnings management are linked to ownership concentration and managerial ownership in specific ways. The presence of institutional investors reduces the magnitude of total upward real earnings management.

scholarly journals Controlling Ownership’s Expropriation through Real Earnings Management and Its’ Impact on Cost Of Equity Capital

2019 ◽  
Author(s):  
Surifah . ◽  
Ifah Rofiqoh ◽  
Krismiaji .
Keyword(s):  
Earnings Management ◽  
Stock Exchange ◽  
Equity Capital ◽  
Real Earnings Management ◽  
Annual Reports ◽  
Private Ownership ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Government Ownership ◽  
Ownership Type

Purpose -This paper discusses empirical research examining whether: 1) controlling owners’typeaffectscostofequitycapital(COEC)andrealearningsmanagement(REM), 2) REM affects COEC, and 3) REM mediates the effect of controlling owners’ type on COEC. Design/methodology/approach–The research uses a sample of 132 publicly listed companiesontheIndonesianStockExchangeforthefiscalyearthatendsonDecember 31intheyearof2011,2012,and2013andthetotalobservationconsistof396firm-years. Cost of equity capital is estimated by using Ohlson Model, Real earnings management as mediating variable is measured by Roychowdhury model. Three models are used to calculate real activity manipulation based on operating activity, production cost, and discretionaryexpenditures.Controlvariablesconsistofcorporategovernancepractices measured by corporate governance indices, ownership concentrated level measured by ownership ratio, firm’s size measured by log total assets, and discretionary accruals measures by Modified Jones Model. Data used in this study is obtained from ICMD, Indonesian Stock Exchange database, and company annual reports. Findings -This research finds evidence that the ownership type affects cost of equity capital, and RCFO except private ownership. With exception for GOV, ownership type affectsproductioncosts-basedrealearningsmanagement(RPE)butallownershiptypes affect discretionary expenditures-based real earnings management (RDE). Moreover, RCFO, RPE, and RDE affect cost of equity capital. Finally, this research reports that RCFO mediates the effect of each ownership type on cost of equity except for private ownership (PRIV), RPE mediates the effect of each ownership type on cost of equity capital except for private ownership(PRIV)and government ownership(GOV)andRDE mediates the effect of each ownership type on cost of equity capital. Originality/value - This study provides further evidence on the effect of controlling ownership on COEC and REM, the effects of REM on COEC, and evidence that REM mediates the effect of controlling owners’ type on COEC.

scholarly journals The Effects of Tax Avoidance, Accrual Earnings Management, Real Earnings Management, and Capital Intensity on the Cost of Equity

2018 ◽  
Vol 10 (1) ◽  
pp. 40-50
Author(s):  
Amrie Firmansyah ◽  
Ahmad Sigid Febriyanto
Keyword(s):  
Earnings Management ◽  
Stock Exchange ◽  
Tax Avoidance ◽  
Multiple Linear Regression Model ◽  
Sampling Technique ◽  
Capital Intensity ◽  
Real Earnings Management ◽  
Cost Of Equity ◽  
Management Actions ◽  
The Cost

This study aims to examine the effects of tax avoidance, accrual profit management, real profit management, and capital intensity on equity costs. The population of this study is a manufacturing company listed on the Indonesia Stock Exchange which amounted to 146 companies. The sampling technique used was purposive sampling and resulted in 420 units of analysis. This type of research is quantitative causality by performing hypothesis testing analysis is done by using multiple linear regression model. The findings of this research are tax avoidance will add to the risks that must be borne by investors thus increasing uncertainty over their investment. Investors consider that accrual profit management actions are opportunistic as risk-taking actions as well as real profit management actions. While on Capital Intensity, investors assume the information on the company’s fixed assets is not useful in making investment decisions. The conclusions that can be taken are tax avoidance, accrual profit management, and earnings management real positive to the cost of equity. However, capital intensity has a negative effect.

PENGARUH MANAJEMEN LABA TERHADAP ABNORMAL RETURN

2009 ◽  
Author(s):  
Zirman Zirman ◽  
Lily Lily
Keyword(s):  
Earnings Management ◽  
Cash Flow ◽  
Significant Influence ◽  
Stock Price ◽  
Abnormal Return ◽  
Real Earnings Management ◽  
Financial Statement ◽  
Discretionary Accrual ◽  
Stock Price Reaction ◽  
Flow Components

This research investigates the consequence of earnings management by analyzing stock price reaction to the full set financial statement in 2008 which can be used by investors to detect earnings management by the firms. This research investigated two forms of earnings management (accrual and real earnings management). The samples is drawn from firms in IDX Statistic 2008 which categorized as active in frequency, value or volume. The method of analysis of this research used multi regression. The results show (1) discretionary accrual had negative significant influence to abnormal return, (2) abnormal cash flow from operation had negative significant influence to abnormal return. The results implicate that the investors are aware of the accrual earnings management (discretionary accrual) and real earnings management (abnormal cash flow) components in the earnings reported by the firms and they react negative to this components.

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