Information environment and earnings management of dual class firms around the world
| Autor: | Ting Li, Nataliya S. Zaiats |
|---|---|
| Rok vydání: | 2017 |
| Předmět: |
Economics and Econometrics
Labour economics 050208 finance Earnings Accrual business.industry media_common.quotation_subject 05 social sciences Control (management) Accounting 050201 accounting Incentive Shareholder Earnings management Voting 0502 economics and business Economics Cash flow business Finance media_common |
| Zdroj: | Journal of Banking & Finance. 74:1-23 |
| ISSN: | 0378-4266 |
| DOI: | 10.1016/j.jbankfin.2016.09.009 |
| Popis: | This study examines the information environment and earnings management of dual class firms. Motivated by the pronounced entrenchment phenomenon at dual class firms due to divergence between voting and cash flow rights, we are interested in whether dual class firms adopt corporate disclosure choices that imply greater opacity as well as employ judgment in financing reporting to misguide the outside shareholders about the firm’s true performance. Based on a sample of 12,672 firms from 19 countries during 1994–2010, we find that dual class status is associated with poorer information environment and increased accrual-based earnings management, consistent with the notion that managers of dual class firms exhibit incentives to conceal private control benefits from the outside shareholders. Results further suggest that dual class ownership structure weakens the mitigating impact of investor protection on earnings management. Following unification, firms experience an improvement in information environment and a decrease in earnings manipulation. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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