volume 19, issue 2, P107-132 2008
DOI: 10.1111/j.1467-646x.2008.01018.x
View full text
|
|
Share

Abstract: This paper examines the relationship between managerial ownership and opportunistic managerial behavior relating to earnings management. Economics theory identifies two apparently conflicting effects of managerial ownership on managers' incentives: the incentive alignment effect and the management entrenchment effect. We construct a theoretical model demonstrating the two effects. This model suggests that as managerial ownership increases, earnings management decreases for both high and low levels of manageri…

expand abstract