Managerial Ownership and Accounting Conservatism in Japan: A Test of Management Entrenchment Effect

Shuto, Akinobu; Takada, Tomomi

doi:10.1111/j.1468-5957.2010.02196.x

Cited by 55 publications

(62 citation statements)

References 64 publications

(190 reference statements)

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“…For our sample, the mean (median) percentage of MO is 0.007 (0.001), which exhibits fair skewness distribution. This value is lower than that of prior studies that have examined the MO of Japanese firms (Shuto & Takada, 2010;Teshima, 2004;Teshima & Shuto, 2008). In our opinion, the lower value arises from the fact that our sample is restricted to firms that issue corporate bonds.…”

Section: Sample Selectioncontrasting

confidence: 79%

The Effect of Managerial Ownership on the Cost of Debt

Shuto

Kitagawa

2011

Journal of Accounting, Auditing & Finance

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This article examines the effect of managerial ownership (MO) on the cost of debt as measured by the interest rate spread on corporate bonds for Japanese firms. First, the authors find that the MO is positively associated with interest rate spread after controlling for the other Japanese ownership structure, cross-shareholdings, and the stable shareholdings by financial institutions. Second, by employing factor analysis to measure the agency cost of debt (ACD) based on financial variables, the authors also find that MO has higher correlation with interest rate spread when the ACD at the time of bond issue is already larger. The results are robust to additional analyses, including the possibility of nonlinear relationship, bond rating, endogeneity problem, and Fama and MacBeth approach. The results suggest that prospective bondholders use MO information to anticipate a firm's future ACD and estimate it higher when the current ACD at issuing bond is already larger. The results also suggest that accounting information is useful to estimate the ACD and increase the efficiency of bond contracting. Finally, although previous studies are often prone to emphasizing the findings on the Japanese unique ownership structure, the results of this article reveal that traditional agency theory on MO apply to Japanese bond market, which is consistent with the findings of U.S. firms.

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Section: Sample Selectioncontrasting

confidence: 79%

The Effect of Managerial Ownership on the Cost of Debt

Shuto

Kitagawa

2011

Journal of Accounting, Auditing & Finance

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“…The model explained 29.2% of the variation in the accrual conservatism (Adjusted R 2 = 29.2%). This adjusted R 2 is higher that the R 2 that reported by Shuto and Takada (2010) and Ahmed and Duellman (2007) at 14% and 12.96% respectively. The following section provides the results of the relationship among the variables under study as hypothesised previously.…”

Section: Hypotheses Testingcontrasting

confidence: 57%

Does Corporate Governance Matter? Evidence from Accounting Conservatism Practices among Jordanian Listed Companies

Al-Sraheen¹,

Fadzil²,

Ismail³

2014

IJLD

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The problem in accounting conservatism practice has been the focus of everyone. In our view, it was attributed amongst other factors to the weak of corporate governance practices. Such study develops an empirical model on the association between some mechanisms of corporate governance and accounting conservatism in terms of foreign ownership, board independence, board size and audit committee, through choosing Jordanian listed companies as research sample. The data were collected through using the annual reports of 113 Jordanian companies for year 2011. Four hypotheses were developed in this study. Upon using the multiple regression analysis, three of them were significant while one was not. This study concludes that there is a positive and significant association between each of foreign ownership, board independence and audit committee and accounting conservatism. While a negative and insignificant relationship between board size and conservatism. In addition, this study opens up opportunities and provides avenues for more in-depth research related to the accounting conservatism.

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“…13 13 In recent years, a number of papers have examined conditional conservatism in an international context. Papers include Giner and Rees (2001), Raonic et al (2004), Lara et al (2005), Dargenidou et al (2007), Jenkins et al (2009), Lara et al (2009) and Shuto and Takada (2010). …”

mentioning

confidence: 99%

Capital Allocation and Timely Accounting Recognition of Economic Losses

Bushman

Piotroski

Smith

2011

Business Fin & Account

282

171

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This paper explores direct relations between corporate investment behavior and the timeliness of accounting recognition of economic losses (TLR) reflected in a country's accounting regime. We explicitly investigate the extent to which TLR influences investment decisions of firm managers. Given the asymmetric emphasis on negative outcomes inherent in TLR, we hypothesize that TLR will most strongly influence investment behavior when managers face deteriorating investment environments. We conjecture that TLR will have an asymmetric impact on investment behavior whereby TLR impacts firms' investment decisions in the face of declining investment opportunities, but not in the face of increasing in investment opportunities. Using firm-level investment decisions spanning twenty five countries, we find that investment responses to declining opportunities increases with TLR, while we find no evidence that TLR influences the sensitivity of investment to increasing investment opportunities. Our results are robust to alternative estimates of TLR, alternative estimates of investment responses to changing investment opportunities, and to controls for important country-level, industrylevel, and firm-level variables that may impact firms' investment decisions.

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Managerial Ownership and Accounting Conservatism in Japan: A Test of Management Entrenchment Effect

Cited by 55 publications

References 64 publications

The Effect of Managerial Ownership on the Cost of Debt

The Effect of Managerial Ownership on the Cost of Debt

Does Corporate Governance Matter? Evidence from Accounting Conservatism Practices among Jordanian Listed Companies

Capital Allocation and Timely Accounting Recognition of Economic Losses

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