We observe the association amid ownership structure and real earnings management in Bangladesh. Our study takes 2195 firm-year observations which are listed on the Dhaka Stock Exchange over the period of 2000-2017. The outcome of the panel least square regression indicates that inside ownership, as well as foreign ownership, is inversely related to real earnings management, whereas institutional ownership is positively related to real earnings management. In particular, firms tend to reduce discretionary expenses to manage earnings if the magnitude of inside ownership is low. In contrast to that, when firms are characterized by more institutional ownership, they are more inclined towards real earnings management through additional price discounts, offering a more friendly credit facility, and lowering discretionary expense. This result is consistent with previous findings. Nevertheless, if firms encounter an absence of foreign ownership, they prefer to manage earnings through operating at over-production levels as well as lowering discretionary expenses. Additionally, we find that corporate governance is playing a beneficial role in limiting real earnings management
This paper attempts at finding the long run relationship and causality between foreign direct investment and economic growth for Bangladesh using time series data over the 1974-2009 period. For empirical testing, we execute three standard econometric tools: Augmented Dickey Fulller (ADF) test for unit root detection, Granger causality test and Testing for Akaike Information Criteria (AIC) and Bayesian-Schwartz Information Criteria (BIC). This study finds that FDI and GDP was not cointegrated. Moreover, using Granger Causality test it is shown that the FDI and openness are not significantly causing the GDP per capital both in the short and long run. The regression result indicates that FDI is positively correlated to the economic growth of Bangladesh but it has not yet been established as a significant determining factor for the growth. The study suggests adopting appropriate steps so that FDI can be used as a contributing factor to the economic development.
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