The impact of earnings management on market liquidity

Trang, Thi Van; Linh, Dinh Hong

doi:10.21511/imfi.17(2).2020.30

Cited by 2 publications

(2 citation statements)

References 21 publications

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“…In contrast, the other stream has shown that EM positively affects SL (e.g., Riahi et al, 2013;Al-Jaifi, 2017;Trang and Linh, 2020). This positive viewpoint reflects that practices of EM can be considered an informative tool to increase earnings persistence and hence increase the number of investors who seek to achieve high and quick returns.…”

Section: Scientificmentioning

confidence: 98%

“…Some studies have attempted to explore the role of GD in enhancing SL (e.g., Ahmed and Ali, 2017;Loukil et al, 2019;Ye et al, 2021;Abidi and Nsaibi, 2022). Other studies examined the impact of EM on SL (e.g., Trang and Linh, 2020;Hunjra et al, 2020;Amawi and Abu Nassar, 2021) (Nguyen and Muniand, 2021); moreover, Egyptian culture highlights the superior status of men in leadership positions. Lastly, empirical studies in Egypt revealed that listed firms in ESE practice IS (e.g., Younis, 2018;Ibrahim et al, 2020).…”

Section: Introductionmentioning

confidence: 99%

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How Does Gender Diversity Moderate the Relationship between Income Smoothing and Stock Liquidity? Evidence from Egypt

Elsayed

Srour

Elsayed

2023

المجلة العلمیة للدراسات والبحوث المالیة والتجاریة

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Purpose -The study seeks to examine the impact of income smoothing (IS) on stock liquidity (SL). Further, it investigates the moderating impact of gender diversity (GD) which is represented by board gender diversity (BGD), and audit committee gender diversity (ACGD) in this relationship.Design/methodology/approach -The study relies on a quantitative research method to assess the impact of IS on SL and then the moderating impact of GD in (62) Egyptian firms from 2018 to 2021. Panel Data regression analysis and the Kruskal-Wallis's test are run to test the hypotheses. Findings -The results conclude a significant negative impact of IS on SL. Moreover, this relationship is enhanced by GD where BGD and BGD×ACGD weakens the negative impact of IS on SL. Also, the study demonstrates significant differences among Egyptian Stock Exchange (ESE) sectors regarding IS, besides, there are insignificant differences regarding SL.Originality/value -This study expands the extant literature by providing novel empirical evidence about the moderating impact of GD on the IS-SL relationship. The study is in line with the growing universal interest in increasing females' participation in boardrooms. Also, the focus of this study is Egypt which has cultural practices and traditional customs toward women. Moreover, the study supports the decisions of regulatory bodies in Egypt to raise the participation of women.

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Section: Scientificmentioning

confidence: 98%

Section: Introductionmentioning

confidence: 99%

How Does Gender Diversity Moderate the Relationship between Income Smoothing and Stock Liquidity? Evidence from Egypt

Elsayed

Srour

Elsayed

2023

المجلة العلمیة للدراسات والبحوث المالیة والتجاریة

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Impact of accrual and real earnings management on the stock liquidity: the month-of-the-year and Ramadan effects

Salehi,

Soleimanizadeh

2023

JIABR

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Purpose The abnormality of the month-of-the-year and Ramadan effects has extensively existed in the stock and other markets. The commercial strategy pattern and the computation of such predictable patterns in the market allow investors to make money. By using anomalies such as the month-of-the-year and the Ramadan effects on earnings management (EM), it is possible to achieve such a goal. This study aims to investigate the month-of-the-year effect and the Ramadan effect on the relationship between accrual earnings management and real earnings management (AEM and REM, respectively) and liquidity in the Iranian capital market. Design/methodology/approach This empirical analysis comprises a panel data set of 80 listed firms (400 observations) on the Tehran Stock Exchange from 2016 to 2020. Findings The findings exhibit that when AEM and REM increase, information asymmetry also increases. The simultaneous increase of these variables leads to a decrease in stock liquidity. Furthermore, the results indicate that the month-of-the-year and Ramadan effects intensify the negative relationship between AEM and REM with stock liquidity. Therefore, EM is affected by the investor’s behavior in specific months. Practical implications Anomalies caused by the Ramadan effect and the month-of-the-year effect on reducing liquidity in the Iranian stock market were confirmed. Investors can use these anomalies to identify predictable patterns, exchange securities according to those patterns and earn abnormal returns. Originality/value To the best of the authors’ knowledge, this is the first study that empirically examined the simultaneous effect of Gregorian and Islamic calendar anomalies on the relationship between EM and liquidity, and while helping managers and other readers, it can be the basis for future research.

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The impact of earnings management on market liquidity

Cited by 2 publications

References 21 publications

How Does Gender Diversity Moderate the Relationship between Income Smoothing and Stock Liquidity? Evidence from Egypt

How Does Gender Diversity Moderate the Relationship between Income Smoothing and Stock Liquidity? Evidence from Egypt

Impact of accrual and real earnings management on the stock liquidity: the month-of-the-year and Ramadan effects

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