Earnings management and corporate spinoffs |
| |
Authors: | Ying Chou Lin Kenneth Yung |
| |
Institution: | 1. Department of Business and Information Technology, Missouri University of Science and Technology, 301 W. 14th Street, Rolla, MO, 65409, USA 2. Department of Finance, College of Business & Public Administration, Old Dominion University, 49th Street and Hampton Blvd., Norfolk, VA, 23529, USA
|
| |
Abstract: | In this study we examine whether firms manage earnings before pursuing corporate spinoffs. Using a sample of 226 completed spinoffs between 1985 and 2005, we find strong evidence of pre-spinoff earnings management among parent firms involved in non-focus-increasing spinoffs. We also find higher levels of earnings management among parent firms that have a higher level of information asymmetry prior to spinoff announcements. Our regression results show a significant negative relation between income-increasing earnings management and the announcement period returns for non-focus-increasing spinoffs. In addition, a significant positive relation is found between income-increasing earnings management and the announcement period returns for focus-increasing spinoffs. The results suggest that income-increasing earnings management sends out negative signals about non-focus-increasing spinoffs but positive signals about focus-increasing spinoffs. |
| |
Keywords: | |
本文献已被 SpringerLink 等数据库收录! |
|