Thang Nguyen, Salem Alhababsah, Thai Nguyen, Alaa Alhaj-Ismail
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引用次数: 0
Abstract
This paper investigates whether CEO–board age similarity has an impact on firms’ earnings management in M&A contexts. We argue that CEO–board age similarity may have an impact on earnings management through two main roles of the board in M&A, i.e., monitoring and advising roles. On the one hand, board–CEO age similarity may improve the quality of the board’s advice on M&A and thus reduce the CEO’s need to manipulate earnings. On the other hand, board–CEO age similarity may trigger friendship, therefore weaken the monitoring function of the board. Using the sample of all share-financed M&A deals in the UK from 2001 to 2018, we find a lower level of earnings management in firms with higher board–CEO age similarity. The evidence thus highlights the importance of the advisory role of the board in M&A. Our findings have an important contribution to the corporate governance literature and also have implications for practice.
期刊介绍：
Review of Quantitative Finance and Accounting deals with research involving the interaction of finance with accounting, economics, and quantitative methods, focused on finance and accounting. The papers published present useful theoretical and methodological results with the support of interesting empirical applications. Purely theoretical and methodological research with the potential for important applications is also published. Besides the traditional high-quality theoretical and empirical research in finance, the journal also publishes papers dealing with interdisciplinary topics.
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