Earnings management, Ownership concentration and Capitalization of Research & Development expenditure

2021 ◽  
pp. 1-15
Author(s):  
Di Yang ◽  
Jun Wen ◽  
Renai Jiang ◽  
Sen Zhang
Keyword(s):  
Earnings Management ◽  
Ownership Concentration ◽  
Research Development ◽  
Management Ownership ◽  
Development Expenditure

Acquired In-process Research Development and Earnings Management

2017 ◽  
Vol 28 (4) ◽  
pp. 577-588
Author(s):  
Junyoup Lee ◽  
Eunsuh Lee ◽  
Kevin H. Kim ◽  
Daniel Gyung H. Paik
Keyword(s):  
Earnings Management ◽  
Process Research ◽  
Research Development

scholarly journals Long-run Stock Performance of Equity-Issuing Firms: The Case of Private Placements in Singapore

2002 ◽  
Vol 05 (03) ◽  
pp. 417-438 ◽  
Author(s):  
Sheng-Syan Chen ◽  
Kim Wai Ho ◽  
Cheng-Few Lee ◽  
Gillian H. H. Yeo
Keyword(s):  
Earnings Management ◽  
Small Firms ◽  
Ownership Concentration ◽  
Positive Relation ◽  
Stock Performance ◽  
Listed Firms ◽  
Long Run ◽  
Private Placements ◽  
Growth Prospects ◽  
Book To Market Ratio

We find that Singapore listed firms which have conducted private placements subsequently experience long-run stock underperformance. The long-run underperformance is more severe for small firms and firms with a higher book-to-market ratio. This suggests that small firms and firms with poorer growth prospects are more likely to time the issue when the stock is temporarily overvalued. Further more, we find a positive relation between the long-run stock performance and the change in ownership concentration of the issuing firms, which is consistent with the alignment-of-interests hypothesis. We do not find evidence supporting the earnings-management hypothesis.

Ownership concentration, earnings management and stock market liquidity: evidence from Malaysia

2017 ◽  
Vol 17 (3) ◽  
pp. 490-510 ◽  
Author(s):  
Hamdan Amer Al-Jaifi
Keyword(s):  
Stock Market ◽  
Earnings Management ◽  
Instrumental Variables ◽  
Generalized Method Of Moments ◽  
Market Liquidity ◽  
Ownership Concentration ◽  
Estimation Methods ◽  
Content Type ◽  
Stock Market Liquidity ◽  
The Impact

Purpose This paper aims to examine whether ownership concentration and earnings management affect the stock market liquidity of Malaysian firms. Design/methodology/approach This study uses a sample of 2,020 yearly firm observations in Bursa Malaysia over the period 2009-2012. The ordinary least square regression is used to examine the relationships. The study undertakes a sensitivity test by regressing the main study variables by using different measurements. Another robustness test is then used, where a regression based on the change in variables and a one-year lag of the independent variables are used. Furthermore, to alleviate the concern of possible endogeneity, the simultaneity and reverse causality are checked using the lag of the dependent variable, fixed effect regression, two-stage least squares using the instrumental variables and the generalized method of moments using instrumental variables analysis. Findings The study finds that firms with a high level of ownership concentration have discrepancies in information between informed and uninformed traders, which impair the stock market liquidity. In addition, this study finds that firms with high earnings management experience greater liquidity. A possible explanation for this is that firms might manage earnings to convey private information to enhance the information content of the earnings. Overall, the evidence suggests that manipulating earnings signals information informatively, particularly in a country with a higher level of ownership concentration and a higher likelihood of expropriating minority shareholders. Originality/value This study enriches the limited empirical research devoted to the impact of earnings management and ownership concentration on stock market liquidity especially in the context of emerging economies. The findings of this study are robust to alternative liquidity measurements, to alternative estimation methods, and to endogeneity bias.

scholarly journals Does the presence of independent directors reduce the practices of earnings management? The moderating role of family ownership concentration

2019 ◽  
Vol 69 (6) ◽  
pp. 638-654
Author(s):  
Deaa Al-Deen Al-Sraheen ◽  
Khaldoon Ahmad Al Daoud
Keyword(s):  
Earnings Management ◽  
Stock Exchange ◽  
Ownership Concentration ◽  
Future Research ◽  
Family Ownership ◽  
Board Independence ◽  
New Ideas ◽  
The Relationship ◽  
Moderating Role

While often criticized, the independence of directors remains a crucial criterion for evaluating the effectiveness of the monitoring role of boards. This study examines the relationship between board independence and earnings management, paying attention to moderation role of family ownership concentration on this relationship using a sample of services companies listed on Amman Stock Exchange ASE. This study documented a significant and negative association between board independence and earnings management. In addition, the moderating role of family ownership concentration on this relationship was also negative. Thus, the board’s monitoring function was inefficient due to the concentration of ownership. These results were obtained through using multiple and sequential regression analysis for the research data from 2013 to 2016. This study provides new ideas for future research such as examining the impacts of the migration of capitals and investors from neighbouring countries such as Syria and Iraq.

scholarly journals Earnings management, corporate governance, and ownership structure of Philippine initial public offerings

2021 ◽  
Vol 18 (4) ◽  
pp. 175-191
Author(s):  
Angelo O. Burdeos
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Initial Public Offerings ◽  
Ownership Structure ◽  
Stock Exchange ◽  
The Philippines ◽  
Ownership Concentration ◽  
Independent Directors ◽  
Ceo Duality ◽  
Public Offerings

Prior studies examined the effect of corporate governance variables on discretionary current accrual, the most widely used measurement of earnings management. The principal-agent conflict implies that the size of the board, the percent of independent directors, CEO duality, and auditor prestige limit discretionary current accruals (DCA). This paper extends past studies by examining the effect of ownership structure on discretionary current accruals. The study determines the level of income-increasing earnings management of initial public offerings (IPOs) in the Philippines and the factors that explain it. Particularly, the paper examines the effect of ownership concentration and largest shareholder ownership on discretionary current accruals. The study uses a final sample of 105 IPO firms in Philippine Stock Exchange (PSE) from 2008 to 2018. Employing the modified Jones’s (1991) model to measure discretionary current accrual and multiple regression analysis, the study finds -4.19% discretionary current accrual on the average. It also reveals that the 2002 Philippine Code of Corporate Governance (PCCG) is ineffective in curbing earnings management. In addition, there is an insignificant relationship between the size of the board, CEO duality, ownership concentration, largest shareholder ownership and auditor prestige, and earnings management. Furthermore, the paper finds a significant relationship between the percent of independent directors, industry sector, return on assets (ROA) and cash flow from operations and earnings management.

scholarly journals Ownership Structure and Earnings Management

2019 ◽  
Vol 4 (2) ◽  
pp. 38-42
Author(s):  
Nico Alexander
Keyword(s):  
Earnings Management ◽  
Ownership Structure ◽  
Stock Exchange ◽  
Institutional Ownership ◽  
Foreign Ownership ◽  
Jel Classification ◽  
Managerial Ownership ◽  
Manufacturing Companies ◽  
Management Ownership ◽  
Independent Variable

Objective – The purpose of this research is to analyze the effect of ownership structure toward earnings management. Methodology/Technique – The population of this research consist of manufacturing companies listed on the Indonesian Stock Exchange (IDX) from 2014 to 2016. This research uses 3 recent years and adds variables that have not been used in prior research. The sample of this research is chosen using a purposive sampling method. Findings – The hypothesis is tested by multiple regressions using an Eviews program to investigate the influence between each independent variable to earnings management. Novelty – The research results shows that institutional ownership, controlling ownership, and foreign ownership affect earnings management whilst managerial ownership has no effect on earnings management. Type of Paper: Empirical. Keywords: Earnings Management; Ownership Structure; Institutional Ownership; Controlling Ownership; Foreign Ownership. Reference to this paper should be made as follows: Alexander, N.; 2019. Ownership Structure and Earnings Management, Acc. Fin. Review 4 (2): 38 – 42 https://doi.org/10.35609/afr.2019.4.2(1) JEL Classification: G40, G41, G49.

scholarly journals The effect of the ownership concentration on earnings management. Empirical evidence from the Italian context

2017 ◽  
Vol 14 (3) ◽  
pp. 236-248 ◽  
Author(s):  
Francesco Grimaldi ◽  
Anna Lucia Muserra
Keyword(s):  
Earnings Management ◽  
Ownership Structure ◽  
Ownership Concentration ◽  
Accounting Fraud ◽  
Policy Makers ◽  
Concentrated Ownership ◽  
Corporate Governance Mechanisms ◽  
The 2008 Financial Crisis ◽  
Italian Context ◽  
Annual Earnings

The numerous cases of business disruptions, involving opportunism and accounting fraud by shareholder, directors and managers, that have occurred in different countries over the past two decades along with institutional and context phenomena and with the rise of the 2008 financial crisis, have refocused the attention of academia, professionals and world policy makers on the disclosure processes used by companies and on corporate governance mechanisms. This paper, after a systematic description of the investigated issues – ownership structure, ownership concentrations and largest shareholders examines the relationship between ownership structure or concentrated ownership and earnings management in the Italian context, characterized by concentrated ownership and the dominance of the largest shareholder who exercises typically significant influences on management decisions directly or indirectly. Existing literature suggests, in an unequivocal way, the effect of the ownership structure on earnings management. According to some researchers, the ownership structure decreases the incentive to manage earnings. Others have the opposite opinion, they think ownership structure on earnings management provides the opportunity and incentive to manipulate earnings. Therefore, the main purpose of this paper is to analyse whether, in the Italian context, a firm’s ownership structure, measured with several variables, exacerbates or alleviates earnings management. Using a sample of 300 non-financial listed Italian firms from 2011 to 2013. We find that discretionary accruals, as a proxy for earnings management, is negatively related to ownership concentration and the second largest shareholder and positively related to first largest shareholder. The study’s results suggest that ownership concentration improve the quality of annual earnings, in a particular agency setting, by reducing the levels of earnings management.

scholarly journals The impact of ownership structure, financial distress on earnings management: The case of Vietnam

2020 ◽  
Author(s):  
Hung Dang Ngoc ◽  
Dung Tran Manh
Keyword(s):  
Earnings Management ◽  
Ownership Structure ◽  
Financial Distress ◽  
Audit Quality ◽  
Foreign Ownership ◽  
State Ownership ◽  
Ownership Concentration ◽  
Regression Methods ◽  
Study Results ◽  
The Impact

The paper examines the effect of ownership structure on profit management in Vietnam. In this study, we explore how three components of ownership structure - the degree of ownership concentration of managers, foreign ownership ratio and state ownership ratio - affect earnings management. In addition, we also consider whether ownership structure affects profit management during financial constraints.<b> </b>We used REM, FEM, GLS, and GMM regression methods. The study results have shown that ownership structure with foreign ownership has a positive effect on earnings management, whereas one with a proportion of state ownership has a contradicting effect. While the degree of ownership concentration does not affect the profit management, in the context of financial restrictions, the ownership ratio has an impact on the management of earnings. Controllable variables in the model, such as firm size, financial leverage, growth rate, profitability and audit quality, all have an impact on earnings management. The results could, potentially, be the basis to help businesses in restricting earnings management behaviour.

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