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Do Institutional Investors Enhance Accounting Earnings Attributes in the Korean Market? |
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| Authors: | Chune Young Chung Donghyun Kim Jin Hwon Lee Kyungjin Lee |
| Institution: | 1. School of Business Administration, College of Business and Economics, Chung-Ang University, Seoul, Korea;2. Lubar School of Business, University of Wisconsin—Milwaukee, Milwaukee, Wisconsin, USA;3. Department of Business Management, Osan University, Osan-si, Gyeonggi-do Korea;4. Graduate School of Business Administration, Chosun University, Dong-gu, Gwangju, Korea |
| Abstract: | This study examines whether the effectiveness of institutional monitoring depends on the economic conditions of emerging capital markets. We use trading volume data by investor type to compute a proxy for total institutional ownership. We then analyze the impact of the proxy variable on accounting earnings attributes and examine whether the association between the two depends on an expectation of market growth. We find that the effect of institutional monitoring decreases when market growth is expected to be low, implying that market growth may be a critical determinant of institutional investors’ long-term monitoring effectiveness in emerging capital markets. |
| Keywords: | earnings management earnings timeliness institutional investor market condition monitoring effectiveness |