Institutional Investors, Real Earnings Management and Cost of Equity: Evidence from Listed High-tech Firms in China

Gao, Han; Shen, Zhuyi; Li, Yichen; Mao, Xuxin; Shi, Yukun

doi:10.1080/1540496x.2019.1650348

Cited by 29 publications

(14 citation statements)

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“…EM is defined as a purposeful practice of using accounting discretion to achieve desired levels of reported accounting earnings (Bajra and Cadez, 2018; Gao et al , 2019; Gavious et al , 2012). In other words, managers have incentives to manipulate accounting numbers either to mislead users of accounting information about the financial performance of a firm or gain personal benefits at the expense of shareholders (Beneish, 2001; Christie and Zimmerman, 1994; Pham et al , 2019).…”

Section: Introductionmentioning

confidence: 99%

Board gender diversity, corporate governance, and earnings management

Orazalin

2019

124

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Purpose The purpose of this study is to examine whether board gender diversity and other board characteristics affect earnings management practices of top public companies in Kazakhstan. Design/methodology/approach The study analyzes data of top public companies for the period 2010-2016. Data on corporate governance were manually collected from annual reports and investment memorandums, and financial data were collected from audited financial statements. Findings The empirical results show that companies with greater board gender diversity are more effective in constraining earnings management. The findings also indicate that companies with larger boards adopt a more restrained approach to earnings management practices, thus supporting the theoretical framework of the study. However, the results provide weak evidence of the association between board independence and earnings quality. Originality/value This study is the first to investigate the relationship between gender diversity and earnings management in emerging markets such as Kazakhstan that offers managerial and policy implications.

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Section: Introductionmentioning

confidence: 99%

Board gender diversity, corporate governance, and earnings management

Orazalin

2019

124

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“…Third, given that the external supervision is not limited to the appointment of independent directors, the study also measures the external supervision level of family firms through the shareholding ratio of institutional investors ( Gao et al, 2020 ). Existing research shows that, compared with individual investors, institutional investors often have higher expectations on the level of corporate governance.…”

Section: Resultsmentioning

confidence: 99%

Fitting the name or unworthy of the name?—Does the name of family firm major shareholder influence family’s egoistic behavior?

Cheng

et al. 2022

Front. Psychol.

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It has been generally believed that the major shareholders of family firms are more willing to implement egoistic behaviors aimed at benefiting the family. This study analyses whether the major shareholder of the family firm whose name contains “Confucian symbols” such as benevolence, righteousness, loyalty, and kindness will reduce family self-interested behaviors as his name indicates. Using a sample consisting of all 425 family firms listed on Small and Medium Enterprise Board and Growth Enterprise Board, the result shows that the major shareholder whose name contains Confucian symbols is less likely to misappropriate corporate assets and less likely to make “family-first” personnel arrangements, meanwhile is more open to external supervision. Further mechanism testing reveals that the major shareholder whose name contains Confucian symbols also tends to choose corporate culture that reflects Confucianism. The study confirms that the name of the major shareholder is one of the factors which can affect the operation of the family business, demonstrates that different family firms have different attitudes towards family self-interest, and promotes the extant research from the “differences between family and non-family firms” level further to the “differences among family firms running by different families” level.

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“…They discovered that stable investment firms with long-term participation intentions can effectively decrease the price of equity when compared to ephemeral institutional investors. The data also show that even under observation of solid hedge funds, true discretionary accruals can be more widely recognized by stockholders, lessening the influence of earnings management on stock prices [3]. According to Chen et al, the total increase in institutional investor holdings is related to the longterm market success of privately traded companies.…”

Section: The Influence Of Investment Firms On Company Financing Strat...mentioning

confidence: 92%

Institutional Investor Shareholding and Corporate Cash Holding: A Literature Review

2022

2022 2nd International Conference on Management Science and Industrial Economy Development (MSIED 2022)

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The purpose of this article is to give a reference for relevant studies by focusing on the influence relationship between institutional investors' shareholdings and company cash holdings in recent years. This paper examines and summarizes relevant domestic and international literature to determine the factors that influence institutional investors' behavioral patterns in terms of corporate financial impact, firm performance, and innovation. The study of institutional investors' shareholding and company cash holdings based on internal management and external market government factors, as well as macro factors, determines that institutional investors' attitude has a significant influence on organizational financial impact, corporate performance, and innovation. It is determined that institutional investors' actions have a significant impact on businesses, and that reasonable and timely management will be beneficial, whereas excessive meddling will be detrimental.

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Institutional Investors, Real Earnings Management and Cost of Equity: Evidence from Listed High-tech Firms in China

Abstract: The material cannot be used for any other purpose without further permission of the publisher and is for private use only.There may be differences between this version and the published version. You are advised to consult the publisher's version if you wish to cite from it.

Cited by 29 publications

References 50 publications

Board gender diversity, corporate governance, and earnings management

Board gender diversity, corporate governance, and earnings management

Fitting the name or unworthy of the name?—Does the name of family firm major shareholder influence family’s egoistic behavior?

Institutional Investor Shareholding and Corporate Cash Holding: A Literature Review

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