Accrual-based Earnings Management, Real Earnings Management and Firm Performance: Evidence from Public Shareholders Listed Firms on Jordanian's Stock Market

2020 ◽  
Vol 12 (1) ◽  
pp. 16-27
Author(s):  
Mohammad Mustafa Dakhlallh
Keyword(s):  
Firm Performance ◽  
Stock Market ◽  
Earnings Management ◽  
Real Earnings Management ◽  
Listed Firms

Financial flexibility, managerial efficiency and firm life cycle on firm performance

2019 ◽  
Vol 16 (2) ◽  
pp. 168-180
Author(s):  
Heng-Yu Chang ◽  
Chun-Ai Ma
Keyword(s):  
Life Cycle ◽  
Firm Performance ◽  
Stock Market ◽  
Life Cycles ◽  
Mature Stage ◽  
Chinese Stock Market ◽  
Financial Flexibility ◽  
Content Type ◽  
Listed Firms ◽  
Managerial Efficiency

Purpose As the capital market in China is still developing, several constraints on a Chinese-listed firm’s financing strategy have a direct impact on its financial flexibility. The purpose of this paper is to reconstruct traditional financial flexibility index (FFI) derived from the western context, provide empirical evidence within eastern context by modified FFI and examine how the managerial efficiency of Chinese-listed firms is demonstrated with modified FFI to escort corporate life cycle hypothesis. Design/methodology/approach By tailored FFI to fit the contemporary operations of Chinese-listed firms, this study investigates how managerial efficiency varies across different life stages to demonstrate the moderating power in the firm performance of financially flexible firm. Findings It is found that financially flexible firms in the Chinese stock market generally experience good firm performance, yet the managerial efficiency could gradually be diminishing at their mature stage even firms’ financial flexibility remains consistent with the agency theory. This paper sheds light on the necessity to reexamine the components in financial flexibility based on the eastern context, and provides avenue to further understand the managerial behavior of Chinese listed firms when considering firm life cycles. Research limitations/implications Although it is difficult for this current study to offer the precise weights on each factor in calculating financial flexibility, the judgment matrix method is adopted to at least provide reliable estimates in accordance with Chinese business contexts with less than 10 percent errors in contrast to the actual weights. Practical implications This modified FFI is particularly suitable for Chinese-listed firms under certain unique financial reporting regulations by adjusting a number of weights and factors. This study may help practitioners understand the managerial conduct of publicly listed firms in China. Originality/value The paper constructs a modified FFI with Chinese stock market characteristics embedded, and provides insightful evidence to explain the new pecking order theory by considering the life cycle stage of Chinese-listed companies.

scholarly journals Editorial: Fundamental pillars of corporate governance research

2020 ◽  
Vol 18 (1, Special Issue) ◽  
pp. 222-224
Author(s):  
Paolo Tenuta ◽  
Alexander Kostyuk
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Stock Market ◽  
Earnings Management ◽  
Board Of Directors ◽  
Financial Reporting ◽  
Corporate Ownership ◽  
Special Issue ◽  
The Board Of Directors ◽  
And Control

Corporate governance is a system designed to improve corporate performance through supervision of management performance to ensure accountability to stakeholders based on a regulatory framework. Board of directors as a field of research becomes a major point for intersection of many other issues of corporate governance, such as financial reporting, firm performance, earnings management, stock market, and reaching even well-established fields of research such as accounting and finance. Most of the papers published in this issue (volume 18, issue 1, special issue) of the Corporate Ownership and Control journal are linked to the board of directors’ issues directly or indirectly.

The Advent of IFRS in Canada: Incidence on Value Relevance

2016 ◽  
Vol 15 (3) ◽  
pp. 113-130 ◽  
Author(s):  
Denis Cormier ◽  
Michel L. Magnan
Keyword(s):  
Stock Market ◽  
Earnings Management ◽  
Stock Markets ◽  
Value Relevance ◽  
Financial Statements ◽  
Market Prices ◽  
Listed Firms ◽  
Ifrs Adoption ◽  
The U.S

ABSTRACT The paper focuses on Canada's enactment of IFRS for publicly accountable firms. We investigate whether IFRS meet one of their stated goals, which is to improve financial statements' relevance for stock markets. Results show that migrating from Canadian GAAP to IFRS enhances the value relevance of earnings but the effect is concentrated among firms that are cross-listed in the U.S. (and that do not report according to U.S. GAAP). The advent of IFRS enhances the value relevance of information contained in footnotes but attenuates the need for non-GAAP measures' disclosure. Stock market prices also embed more precise anticipations about future IFRS earnings. Additional analyses suggest that less earnings management accompanies IFRS adoption. Our results suggest that, for cross-listed firms, the adoption of IFRS enhanced the comparability of their financial statements and, ultimately, their value relevance.

The jinx of real earnings management: evidence from inefficient investments and debt maturity structure in Pakistan

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Umair Saeed Bhutta ◽  
Aws AlHares ◽  
Yasir Shahab ◽  
Adeel Tariq
Keyword(s):  
Earnings Management ◽  
Generalized Method Of Moments ◽  
Emerging Economy ◽  
Real Earnings Management ◽  
Investment Efficiency ◽  
Important Research ◽  
Short Term ◽  
Content Type ◽  
Listed Firms ◽  
The Impact

PurposeThis study aims to investigate two important research questions. First, this research examines the impact of real earnings management on investment inefficiency of the non-financial listed firms in Pakistan. Second, this research further explores the moderating role of short-term debt on the nexus between real earnings management and investment inefficiency. This study attempts to highlight an important research problem i.e. the jinx of real earnings management from the context of an emerging economy.Design/methodology/approachThis study employs the data from non-financial listed firms in Pakistan over the period from 2008 to 2018. The study uses panel data methodologies with firm and year fixed-effects to examine the proposed hypotheses. The results are robust to the use of sensitivity analysis, different estimation techniques and endogeneity issues (using two-stage least squares (2SLS) and generalized method of moments (GMM) techniques).FindingsThe results of the research are twofold. First, consistent with the theoretical arguments, the findings reveal that real earnings management increases investment inefficiency and results in over-investments by the firms. Second, short-term debt attenuates the relationship between real earnings management and investment inefficiency. It implies that a higher level of short-term debt weakens the adverse effects of real earnings management on the investment efficiency of the firm.Originality/valueThis study offers original findings on the issues pertaining to the quality of accounting and financial reporting in an emerging economy like Pakistan, where the implementation of regulations is weak in the corporate world and management frequently exploits shareholders' wealth for the short-term benefits.

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