Institutional ownership composition and accounting conservatism

Lin, Ling

doi:10.1007/s11156-014-0472-2

Cited by 32 publications

(18 citation statements)

References 45 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Specifically, they find that an increase in the ownership of monitoring institutional investors is positively associated with greater demand on accounting conservatism since these investors have longer investment horizons, which make them enjoy the benefits of conservative reporting. Similarly, Lin (2016) provides supporting evidence on the positive relationship between dedicated institutional ownership and conservative reporting.…”

Section: Hypotheses Developmentmentioning

confidence: 65%

Foreign institutional ownership and demand for accounting conservatism: evidence from an emerging market

Khalil

Ozkanc

Yıldız

2019

Rev Quant Finan Acc

View full text Add to dashboard Cite

This study investigates how foreign institutional ownership interacts with accounting conservatism in an emerging market setting. We posit that weak investor protection and a high degree of information asymmetry between insiders and outside investors increase demand for conservative reporting in firms operating in emerging markets. Foreign investors in this setting have informational disadvantages relative to their domestic peers and have difficulties in getting access to data. Using a sample of Turkish firms, we find that foreign institutions (particularly foreign corporate investors) demand more conservative reporting in the investee firms. Moreover, we show that this association is more pronounced among firms with greater asymmetric information problems and growth opportunities. Our additional tests reveal that the direction of causality flows from foreign institutional ownership to conservatism, and not vice versa.

show abstract

Section: Hypotheses Developmentmentioning

confidence: 65%

Foreign institutional ownership and demand for accounting conservatism: evidence from an emerging market

Khalil

Ozkanc

Yıldız

2019

Rev Quant Finan Acc

View full text Add to dashboard Cite

show abstract

“…To test whether the findings are robust, we employ the model of Basu (1997) to measure the asymmetric timeliness of bad news over good news as a proxy of accounting conservatism. Following prior research (e.g., Erkens et al 2014;Hu and Jiang 2019;Kong et al 2017;Lin 2014), we interact the measures of banking expertise on the board with the variables in the model. We also follow Ball et al (2013a) to include industry and year fixed effects to mitigate heterogeneity bias.…”

Section: 5mentioning

confidence: 99%

Accounting conservatism and banking expertise on board of directors

Nguyen

Duong

Nguyen

et al. 2019

Rev Quant Finan Acc

View full text Add to dashboard Cite

Previous studies show mixed evidence of the role of banking expertise on the board of directors on accounting conservatism. In this paper, we add to this growing literature by providing an innovative way to measure banking expertise based on life-time working history in banks of all individual directors on the board. We find that accounting conservatism is negatively affected by banking expertise on the board. Also, the results indicate that banking expertise on the board has a more pronounced impact on accounting conservatism when firms have high bankruptcy risk and when firms have high financial leverage. The evidence has some implications for boards of directors.

show abstract

“…() find that long‐term investor ownership reduces earnings management but also accounting misconduct, financial fraud, and option backdating . Lin () finds that dedicated institutional ownership increases the degree of accounting conservatism. Looking at seasoned equity offerings, Hao () provide results consistent with the argument that long‐term shareholders prevent misuse of the cash flow provided by equity issues.…”

Section: The Effect Of Investment Horizon On Corporate Policiesmentioning

confidence: 99%

When Ownership Structure Matters: A Review of the Effects of Investor Horizon on Corporate Policies

Garel

2016

Journal of Economic Surveys

View full text Add to dashboard Cite

This paper surveys the literature on the impact of investor horizon on corporate policies. While the desire to encourage long-term investor ownership is shared among managers, boards and policy makers, how greater long-term investor ownership benefits corporate decisions and ultimately firm performance is still under academic investigation. The contribution of this paper is twofold. The paper's first contribution is providing an up-to-date review of theoretical and empirical findings. This paper introduces the groups of long-term and short-term investors and the related classification methodologies and investor horizon proxies used to form them. It further reviews the determinants of an investor's horizon. Then, this paper organizes the literature on the impact of investor horizon on corporate policies around three main channels: the short-term pressure hypothesis, the monitoring hypothesis, and the catering hypothesis. The paper's second contribution is identifying six major challenges ahead that need to be addressed to improve the understanding of the impact of long-term (short-term) investor ownership on corporates policies. These challenges represent opportunities for further research.

show abstract

Institutional ownership composition and accounting conservatism

Cited by 32 publications

References 45 publications

Foreign institutional ownership and demand for accounting conservatism: evidence from an emerging market

Foreign institutional ownership and demand for accounting conservatism: evidence from an emerging market

Accounting conservatism and banking expertise on board of directors

When Ownership Structure Matters: A Review of the Effects of Investor Horizon on Corporate Policies

Contact Info

Product

Resources

About