Earnings management and earnings predictability: A quantile regression approach

2020 ◽  
pp. 031289622094575
Author(s):  
Leon Li ◽  
Nen-Chen Richard Hwang ◽  
Gilbert V Nartea
Keyword(s):  
Quantile Regression ◽  
Earnings Management ◽  
Information Asymmetry ◽  
Management Strategy ◽  
Management Strategies ◽  
Jel Classification ◽  
High Quantiles ◽  
Regression Approach ◽  
Earnings Predictability ◽  
Managerial Choice

This study argues that the managerial choice of earnings management strategy could be contingent upon a firm’s information asymmetry and such a strategy may affect the firm’s earnings predictability. Measuring information asymmetry by earnings predictability based on the subsequent industry-adjusted dispersion in analysts’ forecasts and employing a quantile regression to analyze 28,383 US firm-year observations from 1988 to 2014, this study reports that the effect of earnings management strategies on earnings predictability is nonuniform. Specifically, the amount of absolute discretionary accruals is negatively (positively) related to the subsequent industry-adjusted dispersion in the low (high) quantiles of analysts’ forecasts. These results support the hypothesis that a firm could implement earnings management strategies according to the degree of information asymmetry between the firm’s management and corporate outsiders. JEL Classification: G12, G32

Long-Term Orientation and Earnings Management Strategies

2019 ◽  
Vol 18 (3) ◽  
pp. 97-119 ◽  
Author(s):  
Jesper Haga ◽  
Fredrik Huhtamäki ◽  
Dennis Sundvik
Keyword(s):  
Earnings Management ◽  
High Precision ◽  
Management Strategy ◽  
Management Strategies ◽  
Real Earnings Management ◽  
Short Term ◽  
Country Level ◽  
Earnings Benchmarks ◽  
Jel Classifications

ABSTRACT In this study, we investigate how country-level long-term orientation affects managers' willingness to engage in earnings management and choice of earnings management strategy. Using a comprehensive dataset of 47 countries for the period from 2003 to 2015, we find that firms in long-term-oriented cultures rely relatively more on earnings management through accruals, while firms in short-term-oriented cultures engage in relatively more real earnings management. Furthermore, we find a larger discontinuity around earnings benchmarks in long-term-oriented cultures suggesting that manipulation of accruals enables benchmark beating with high precision. JEL Classifications: M14; M16; M21; M41.

Wastewater management strategies for the black sea coast of Turkey

1999 ◽  
Vol 39 (8) ◽  
pp. 169-176
Author(s):  
I. Ozturk ◽  
E. Yuksel ◽  
A. Tanik
Keyword(s):  
Black Sea ◽  
Management Strategy ◽  
Population Distribution ◽  
Management Strategies ◽  
The Black Sea ◽  
Wastewater Management ◽  
Black Sea Coast ◽  
The Cost ◽  
Solid Waste Landfills ◽  
Sea Coast

The Black Sea, surrounded by six riparian countries, is under the threat of severe pollution, giving rise to the need of taking precautions to protect it from further deterioration. In this paper, an effort putting forth a wastewater treatment and management strategy is outlined for the Black Sea coast of Turkey, including both the technical and financial aspects. The present situation of the coast in terms of land-based pollution and infrastructure is stated, followed by an applicable management strategy. The strategy developed for the coastal settlements involves various stagewise treatment schemes based on population distribution and densities along the coastline, and on the availability of land in a specified period of thirty years. Similar strategies are proposed for the control of pollution originating from industries, for those carried by rivers joining the sea, and for leachate of solid waste landfills. The cost estimations of various treatment schemes are also given in terms of population equivalents.

scholarly journals IPO’s Long-Run Performance: Hot Market versus Earnings Management

2021 ◽  
Vol 14 (3) ◽  
pp. 132
Author(s):  
Tsai-Yin Lin ◽  
Jerry Yu ◽  
Chia-Yi Lin
Keyword(s):  
Earnings Management ◽  
Information Asymmetry ◽  
Explanatory Power ◽  
Market Condition ◽  
Relative Importance ◽  
Long Run ◽  
Hot Market

One of the IPO-related anomalies that have been well-discussed in the finance literature is the IPO’s long-running underperformance. Two of the major explanations of that phenomenon are: “Hot market” and earnings management. This study investigates the relative importance of these two explanations to the IPO’s long-run underperformance. Our results show that although both hot market and earnings management play a role in explaining IPO’s long-run performance in their own rights, earnings management no longer exhibits significant explanatory power when the IPOs are issued in the cold market. While the IPOs that are issued in the hot market still tend to underperform in the long run even if the firms do not engage in earnings management. Our findings are consistent with the literature related to the information asymmetry in IPO market. And, because the information asymmetry is more severe in hot market condition, IPOs issued in hot market tend to exhibit poorer returns than those issued in cold market.

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