Co-CEO Structure and Earnings Smoothing Incentives

IF 1.8 4区 经济学 Q2 BUSINESS, FINANCE
Gun Lee, Jae Eun Shin
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引用次数: 0

Abstract

This paper investigates the effects of a co-CEO structure on earnings smoothing and its implications for the informativeness of earnings. While the consequences of a co-CEO structure have been relatively underexplored in prior research, existing studies suggest potential benefits, such as higher valuations and stronger internal governance. This paper delves into the specific consequences of a co-CEO structure, focusing on earnings smoothing practices. Using data from Korean firms, where co-CEO structures are prevalent, we find that firms with a co-CEO structure exhibit smoother earnings compared to those with a sole-CEO structure. However, the informativeness of these smooth earnings is reduced under a co-CEO structure, suggesting that co-CEOs engage in earnings smoothing primarily for their own benefit, rather than to provide more information to investors. Additional analyses reveal that co-CEOs' earnings smoothing leads to adverse consequences for investors, including lower earnings quality, higher costs of capital, increased financial distress, greater credit risk, and higher stock price crash risk. Our study contributes to the literature by highlighting the potential costs associated with co-CEO structures, particularly in terms of reduced earnings informativeness.

联席ceo结构与收益平滑激励
本文研究了联合ceo结构对盈余平滑的影响及其对盈余信息性的影响。虽然之前的研究对联席ceo结构的影响的探索相对不足,但现有的研究显示了潜在的好处,比如更高的估值和更强的内部治理。本文深入探讨了联席ceo结构的具体后果,重点是盈利平滑实践。利用共同ceo结构普遍存在的韩国公司的数据,我们发现,与单一ceo结构的公司相比,共同ceo结构的公司表现出更平稳的收益。然而,在联合ceo结构下,这些平滑收益的信息含量降低了,这表明联合ceo参与平滑收益主要是为了自己的利益,而不是为了向投资者提供更多的信息。进一步的分析表明,联合ceo的收益平滑会给投资者带来不利后果,包括较低的收益质量、较高的资本成本、增加的财务困境、更大的信用风险和更高的股价崩溃风险。我们的研究通过强调与联席ceo结构相关的潜在成本,特别是在减少收益信息方面,为文献做出了贡献。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
2.60
自引率
20.00%
发文量
36
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