The Real Consequences of Classification Shifting: Evidence from the Efficiency of Corporate Investment

IF 2.5 3区 管理学 Q2 BUSINESS, FINANCE
Seraina C. Anagnostopoulou, Kamran T. Malikov
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Abstract

This study investigates the real consequences of classification shifting by examining its effect on corporate investment efficiency. The underlying expectation is that the ways of reporting different profit items within the income statement should increase information asymmetry between managers and capital providers regarding the level of core and, so, more likely repeatable firm performance. We anticipate that classification shifting will aggravate agency problems and distort managers’ own perceptions of their firms’ sustainable profitability, resulting in imperfect investment-related information sets for them, ultimately leading to inefficient investing. We find that classification shifting strongly and significantly decreases the responsiveness of investment to growth opportunities and is, thus, associated with less efficient investing. After investigating the economic mechanisms explaining this association, our results are more pronounced when other information and agency problem-related factors that should protect against inefficient investing are weaker, and also for firms whose managers have fewer opportunities to learn from peers, which could alleviate potential classification shifting-related distortion effects on managerial perceptions. Our study provides evidence on the adverse real consequences of classification shifting, a form of earnings management without any reversing effects for bottom-line future performance, with reference to a very important firm-level outcome; namely, efficient investing.
分类转移的真实后果:来自企业投资效率的证据
本研究通过考察分类转移对企业投资效率的影响来考察分类转移的真实后果。潜在的期望是,在损益表中报告不同利润项目的方式应该增加管理人员和资本提供者之间关于核心水平的信息不对称,因此,更有可能重复公司业绩。我们预计,分类转换将加剧代理问题,扭曲管理者对企业可持续盈利能力的认知,导致与投资相关的信息集不完善,最终导致投资效率低下。我们发现,分类转移强烈而显著地降低了投资对增长机会的反应性,因此,与低效率投资有关。在研究了解释这一关联的经济机制后,我们的结果在其他信息和代理问题相关因素(这些因素应该防止低效投资)较弱时更为明显,并且对于管理者从同行中学习的机会较少的公司来说,这可能会减轻潜在的分类转移相关的扭曲效应。我们的研究提供了关于分类转移的不利实际后果的证据,这是一种对底线未来绩效没有任何逆转效应的盈余管理形式,参考了一个非常重要的公司层面的结果;即高效投资。
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来源期刊
European Accounting Review
European Accounting Review BUSINESS, FINANCE-
CiteScore
7.00
自引率
6.10%
发文量
58
期刊介绍: Devoted to the advancement of accounting knowledge, it provides a forum for the publication of high quality accounting research manuscripts. The journal acknowledges its European origins and the distinctive variety of the European accounting research community. Conscious of these origins, European Accounting Review emphasises openness and flexibility, not only regarding the substantive issues of accounting research, but also with respect to paradigms, methodologies and styles of conducting that research. Though European Accounting Review is a truly international journal, it also holds a unique position as it is the only accounting journal to provide a European forum for the reporting of accounting research.
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