Capital market pressure,real earnings management,and institutional ownership stability - Evidence from Poland |
| |
| Affiliation: | 1. School of Business, Independent University, Bangladesh, Bashundhara R/A, Dhaka 1229, Bangladesh;2. Department of Accounting, La Trobe University, Bundoora, Vic 3086, Australia;1. Southampton Management School, University of Southampton, Highfield, Southampton SO17 1BJ, UK;2. School of Business and Management, Francis Bancroft Building, Queen Mary, University of London, Mile End Road, London E1 4NS, UK;3. Beijing Institute of Securities and Futures, East Wing, Fortune Times Building, Taipingqiao Street, Xicheng District, Beijing 100032, China |
| |
| Abstract: | This study investigates whether and how institutional ownership stability influences real earnings management. We find that institutional investors holding stable equity stakes play an important monitoring role in reducing real earnings management by managers pressured by capital market forces to “meet or beat” earnings targets. We also document no relationship between institutional ownership stability and real earnings management in companies with entrenched managers protected from capital market pressure by a dual-class ownership structure. Our findings of the negative association between real earnings management and institutional ownership stability also indicate that firms with more stable ownership are engaged in lesser sales manipulation and overproduction. In addition, we reveal that pressureresistant institutions (pension funds and mutual funds) that reduce real earnings management are an essential part of the external governance mechanism in an emerging economy. |
| |
| Keywords: | |
| 本文献已被 ScienceDirect 等数据库收录！ |
|
