Military-experienced senior executives, corporate earnings quality and firm value

IF 1.1 Q3 BUSINESS, FINANCE

Journal of Accounting Literature Pub Date : 2023-08-22 DOI:10.1108/jal-08-2022-0089

Zhe Li, Xinrui Liu, Bo Wang

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引用次数: 0

Abstract

PurposeAccounting scandals and earnings management problems at large firms such as Global Crossing and Enron have resulted in lots of wealth loss not only to corporate investors but also led tremendous damage to societies. Hence, policymakers and academic researchers have started to explore mechanisms to prevent improprieties in financial reporting and further enhance firm value. Using data from United States (US)-listed companies between 2000 and 2018, this article explores the effect of ex-military executives on earnings quality, the role of financial analysts in their interplay and the firm value implication of earnings quality driven by ex-military executives.Design/methodology/approachThis study employs a firm fixed-effects model to validate the main conjecture and adopts the weighted least squares, Granger causality analysis, instrumental variable approach, propensity score matching, entropy balancing approach and dynamic system Generalized Method of Moments (GMM) estimator to address robustness and endogeneity issues.FindingsAuthors reveal that companies run by ex-military senior executives exhibit lower levels of accruals-based and real earnings management than those without. The effect of management military leadership on constraining earnings management is more prominent for companies with low analyst coverage, suggesting that the military experience of executives could be a substitute for external monitoring. Authors also find that these ethical managers alleviate the negative impact of earnings management on firm value and that companies managed by these managers exhibit higher firm performance.Practical implicationsThis study highlights the importance of the intrinsic motivation behind the effect of military experience on senior managers' personalities and offers essential stakeholder-related implications regarding the effect of military experience. The military experience of senior managers helps facilitate the attainment of broader corporate governance and economic objectives.Originality/valueThis article adds new insights to the literature on the role of managerial military experience in decision-making processes, financial reporting outcomes and firm performance by employing the upper echelons and imprinting theoretical perspectives.

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军队经验丰富的高管、企业盈利质量和公司价值

全球性跨国公司（Global Crossing）和安然公司（Enron）等大公司的蓄意会计丑闻和盈余管理问题不仅给企业投资者造成了大量财富损失，还对社会造成了巨大损害。因此，政策制定者和学术研究人员已经开始探索防止财务报告不当行为和进一步提高公司价值的机制。本文利用2000年至2018年间美国上市公司的数据，探讨了前军方高管对盈利质量的影响、财务分析师在其相互作用中的作用以及前军方高管推动的盈利质量对公司价值的影响。设计/方法论/方法本研究采用固定效应模型来验证主要猜想，并采用加权最小二乘法、格兰杰因果关系分析法、工具变量法、倾向得分匹配法、熵平衡法和动态系统广义矩量估计量来解决稳健性和内生性问题。研究结果作者透露，由前军方高管经营的公司表现出的基于应计利润和实际盈余管理水平低于没有应计利润的公司。对于分析师覆盖率较低的公司来说，管理层军事领导对约束盈余管理的影响更为突出，这表明高管的军事经验可以替代外部监控。作者还发现，这些道德管理者减轻了盈余管理对公司价值的负面影响，并且这些管理者管理的公司表现出更高的公司绩效。实际含义本研究强调了军事经验对高级管理人员人格影响背后的内在动机的重要性，并就军事经验的影响提供了与利益相关者相关的重要含义。高级管理人员的军事经验有助于实现更广泛的公司治理和经济目标。原创性/价值这篇文章通过采用高层和深刻的理论观点，为有关管理军事经验在决策过程、财务报告结果和公司绩效中的作用的文献增添了新的见解。

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

Journal of Accounting Literature BUSINESS, FINANCE-

CiteScore

6.50

自引率

0.00%

发文量

期刊介绍： The objective of the Journal is to publish papers that make a fundamental and substantial contribution to the understanding of accounting phenomena. To this end, the Journal intends to publish papers that (1) synthesize an area of research in a concise and rigorous manner to assist academics and others to gain knowledge and appreciation of diverse research areas or (2) present high quality, multi-method, original research on a broad range of topics relevant to accounting, auditing and taxation. Topical coverage is broad and inclusive covering virtually all aspects of accounting. Consistent with the historical mission of the Journal, it is expected that the lead article of each issue will be a synthesis article on an important research topic. Other manuscripts to be included in a given issue will be a mix of synthesis and original research papers. In addition to traditional research topics and methods, we actively solicit manuscripts of the including, but not limited to, the following: • meta-analyses • field studies • critiques of papers published in other journals • emerging developments in accounting theory • commentaries on current issues • innovative experimental research with strong grounding in cognitive, social or anthropological sciences • creative archival analyses using non-standard methodologies or data sources with strong grounding in various social sciences • book reviews • "idea" papers that don''t fit into other established categories.