Institutional ownership, earnings management and earnings surprises: evidence from 39 years of U.S. data

IF 2.3 Q2 ECONOMICS
Justin G. Davis, Miguel García-Cestona
{"title":"Institutional ownership, earnings management and earnings surprises: evidence from 39 years of U.S. data","authors":"Justin G. Davis, Miguel García-Cestona","doi":"10.1108/jefas-01-2023-0021","DOIUrl":null,"url":null,"abstract":"Purpose As the influence of institutional investors over managerial decision-making grows, so does the importance of understanding the effect of institutional investor ownership (IO) on firm outcomes. The authors take a comprehensive approach to studying the effect of IO on earnings management (EM). Design/methodology/approach The authors study the relation between IO and EM using a sample of 59,503 listed U.S. firm-year observations from 1981–2019. The authors proxy EM with earnings surprises and with accrual-based and real activity measures. The authors test for nonlinear relations and analyze changes resulting from the passage of the Sarbanes–Oxley Act. Findings The findings support a positive IO-EM relation overall, but show that the relation is dynamic and heavily context-dependent with evidence of nonlinearity. The authors also find evidence that IO positively affects accrual-based EM and real activities EM negatively. Originality/value To the authors’ knowledge, this is the first study of the IO-EM relation to consider evidence of nonlinearity in the U.S. context, measuring changes to the relation over time, and with the use of several measures of EM.","PeriodicalId":53491,"journal":{"name":"Journal of Economics, Finance and Administrative Science","volume":null,"pages":null},"PeriodicalIF":2.3000,"publicationDate":"2023-11-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"2","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Economics, Finance and Administrative Science","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1108/jefas-01-2023-0021","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 2

Abstract

Purpose As the influence of institutional investors over managerial decision-making grows, so does the importance of understanding the effect of institutional investor ownership (IO) on firm outcomes. The authors take a comprehensive approach to studying the effect of IO on earnings management (EM). Design/methodology/approach The authors study the relation between IO and EM using a sample of 59,503 listed U.S. firm-year observations from 1981–2019. The authors proxy EM with earnings surprises and with accrual-based and real activity measures. The authors test for nonlinear relations and analyze changes resulting from the passage of the Sarbanes–Oxley Act. Findings The findings support a positive IO-EM relation overall, but show that the relation is dynamic and heavily context-dependent with evidence of nonlinearity. The authors also find evidence that IO positively affects accrual-based EM and real activities EM negatively. Originality/value To the authors’ knowledge, this is the first study of the IO-EM relation to consider evidence of nonlinearity in the U.S. context, measuring changes to the relation over time, and with the use of several measures of EM.
机构持股、盈余管理和盈余意外:来自美国39年数据的证据
随着机构投资者对管理决策的影响越来越大,理解机构投资者所有权(IO)对公司结果的影响的重要性也越来越大。本文采用一种综合的方法来研究IO对盈余管理的影响。作者使用1981-2019年59,503个美国上市公司年度观察样本研究了IO和EM之间的关系。两位作者用意外收益、基于权责发生制和实际活动指标来衡量新兴市场。作者检验了非线性关系,并分析了萨班斯-奥克斯利法案通过后的变化。研究结果总体上支持一个积极的IO-EM关系,但表明这种关系是动态的,并且严重依赖于非线性的证据。作者还发现证据表明,IO对权责发生制的EM有积极影响,而对实际活动EM有消极影响。原创性/价值据作者所知,这是第一个考虑美国背景下非线性证据的IO-EM关系研究,测量了随时间的关系变化,并使用了几种EM测量方法。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
求助全文
约1分钟内获得全文 求助全文
来源期刊
Journal of Economics, Finance and Administrative Science
Journal of Economics, Finance and Administrative Science Economics, Econometrics and Finance-Economics, Econometrics and Finance (all)
CiteScore
5.10
自引率
20.80%
发文量
23
审稿时长
12 weeks
期刊介绍: The Universidad ESAN, with more than 50 years of experience in the higher education field and post graduate studies, desires to contribute to the academic community with the most outstanding pieces of research. We gratefully welcome suggestions and contributions from business areas such as operations, supply chain, economics, finance and administration. We publish twice a year, six articles for each issue.
×
引用
GB/T 7714-2015
复制
MLA
复制
APA
复制
导出至
BibTeX EndNote RefMan NoteFirst NoteExpress
×
提示
您的信息不完整,为了账户安全,请先补充。
现在去补充
×
提示
您因"违规操作"
具体请查看互助需知
我知道了
×
提示
确定
请完成安全验证×
copy
已复制链接
快去分享给好友吧!
我知道了
右上角分享
点击右上角分享
0
联系我们:info@booksci.cn Book学术提供免费学术资源搜索服务,方便国内外学者检索中英文文献。致力于提供最便捷和优质的服务体验。 Copyright © 2023 布克学术 All rights reserved.
京ICP备2023020795号-1
ghs 京公网安备 11010802042870号
Book学术文献互助
Book学术文献互助群
群 号:481959085
Book学术官方微信