Information Asymmetry and Earnings Management: Some Evidence

1998 ◽  
Author(s):  
Vernon J. Richardson
Keyword(s):  
Earnings Management ◽  
Information Asymmetry

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.

scholarly journals A comparison of earnings management between domestic and cross-border mergers.

2010 ◽  
Vol 7 (4) ◽  
pp. 19-33
Author(s):  
Amy Yueh-Fang Ho
Keyword(s):  
Asymmetric Information ◽  
Mergers And Acquisitions ◽  
Earnings Management ◽  
Information Asymmetry ◽  
Discretionary Accruals ◽  
Informational Asymmetry ◽  
Empirical Results ◽  
Cross Border ◽  
Acquiring Firms ◽  
International Mergers

This study examines how U.S. acquiring firms managed their earnings by means of discretionary accruals prior to the announcement of stock-for-stock domestic and cross-border mergers during the period 1980 to 2002. The objective of this study is to determine whether earnings management is exacerbated in cross-border mergers according to the informational asymmetry hypothesis. The results show that that acquiring firms tend to manage earnings upward prior to stock swap domestic takeovers. In addition, the results reveal some evidence of earnings management prior to stock swap cross-border takeovers. However, the empirical results exhibit no significant distinction in earnings management between the domestic and cross-border mergers. Despite the possible existence of asymmetric information associated with cross-border takeover activities, the international mergers and acquisitions do not facilitate managers to engage in more aggressive earnings management. The findings suggest that the higher degree of information asymmetry in cross-border mergers does not contribute to a higher degree of earnings management.

scholarly journals PENGARUH ASIMETRI INFORMASI DAN MANAJEMEN LABATERHADAP BIAYA MODAL EKUITAS PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA (BEI) TAHUN 2013-2015

2018 ◽  
Vol 6 (1) ◽  
Author(s):  
Yudi Partama Putra
Keyword(s):  
Earnings Management ◽  
Information Asymmetry ◽  
Stock Exchange ◽  
Equity Capital ◽  
Manufacturing Companies ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Capital Costs ◽  
The Cost ◽  
Variable Information

Yudi Partama Putra; This study aims to (1) determine the effect of asymmetry of information on costs of equity at manufacturing companies listed in Indonesia Stock Exchange period 2013-2015, (2) know the effect of earnings management on equity capital costs at manufacturing companies listed on the Stock Exchange in 2013- 2015, (3) determine the effect of information asymmetry and earnings management simultaneously on the cost of equity capital in manufacturing companies listed on the Indonesian Stock Exchange 2013-2015. The population in this study is manufacturing company listed on the Indonesia Stock Exchange. While the sample selection is taken by using purposive sampling method. The classical assumption test used in this research is using normality test, multicollinearity test, heteroscedasticity test, and autocorrelation test. Analysis of data used to test the hypothesis is multiple linear regression analysis techniques. Based on the results of the research indicate that (1) information asymmetry has positive and significant effect to cost of equity (2) earnings management has no significant effect on Cost of equity. F test results show that the variable information asymmetry and earnings management simultaneously affect the cost of equity capital. The result of determination coefficient test with R square shows that variable information asymmetry and earnings management influence cost equity capital equal 10,7%, while the rest 89,3% influenced by other variables.Key Words: Information Asymetry, Earnings Management, and Cost Of Equity.

BANK EARNINGS MANAGEMENT AND DIVIDEND POLICY UNDER AGENCY PROBLEM CONTEXTS

2020 ◽  
Vol 15 (02) ◽  
pp. 2050005
Author(s):  
DUNG VIET TRAN
Keyword(s):  
Earnings Management ◽  
Information Asymmetry ◽  
Dividend Policy ◽  
Bank Holding Companies ◽  
Holding Companies ◽  
Additional Information ◽  
Discretionary Behaviors ◽  
The Impact ◽  
High Information

Using a large sample of U.S. bank holding companies (BHC) from 2000:Q1–2017:Q4, we investigate the impacts of dividend policy to bank earnings management, and document that banks that pay dividends tend to be less opaque than banks that do not pay dividends. The dividend policy not only impacts the conditional average earnings management of banks, but also exerts influence on their dispersion. The impact of dividend policy appears to be more profound for highly opaque banks. We identify different conditions that motivate different discretionary behaviors of banks, which allows us to better observe different managerial motives between dividend-paying and dividend-non-paying banks. Under high information asymmetry context, there is valuably additional information conveyed by paying dividends, and it follows that the role of dividends as a means of conveying information is more pronounced. For banks subject to high agency problems, paying dividends make them to be less opaque through reducing the discretionary behaviors.

Insider Trading, Earnings Management and Information Asymmetry

2015 ◽  
Author(s):  
Abu Zakir Md. Rasel Chowdhury ◽  
Sabur Mollah ◽  
Omar Al Farooque
Keyword(s):  
Earnings Management ◽  
Information Asymmetry ◽  
Insider Trading
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