Real earnings management in family firms: evidence from Chinese listed firms

Tian, Xiaolin; Yang, Tao; Yu, Tong

doi:10.1504/ijrm.2018.091814

Cited by 12 publications

(13 citation statements)

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“…These indicates that affiliated family firms restrain activity-based manipulation by the listed non-financial firms in Nigeria and do not trade off their long term value for short term benefits. These findings are concord with the findings of (Bonacchi, Massimiliano Fabrizio, 2017;Tian et al, 2018;wan Nadiah & Mansor, 2018), which reveals that family affiliation is negatively correlated with real earnings management in Italy, Malaysia and Chinese's study. However, the findings are not in harmony with (Paiva et al, 2018) Spanish study unless if moderated by analysts' coverage.…”

Section: Modelsupporting

confidence: 74%

“…The independent variables of the study are (i) family affiliation and (ii) related party transactions. Family affiliation is measured by the percentage of common stock ownership by founding family members (Achleitner et al, 2014;Guo & Ma, 2015;Tian, Yang, & Yu, 2018). Also, related party transactions are measured by the natural logarithm of annual transaction value and were derived from firms' financial reports (Marchini et al, 2018;Shin et al, 2019).…”

Section: Methodsmentioning

confidence: 99%

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Mediating Effect of Audit Committee Independence on the Link Between Firms Internal Governance Tunneling from Real Earnings Management

Ibrahim¹,

Mansor²,

Nasidi³

2020

IJARBSS

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This paper examines the impact of both, family affiliation and related party transactions tunneling from real activities-based manipulation mediated by audit committee independence based on sample listed non-financial firms Nigeria from 2011 to 2017. The data were obtained from Thomson Reuters DataStream and financial reports of firms. The fixed effects, random effects (GLS), and the generalized method of moments (GMM) were used for panel data regression analysis using the firm internal governance and real earnings management. The findings showed that audit committee independence mediates the relationship between firm internal governance and real earnings management. The results confirm some previous literature that the monitoring role of the affiliated family firms is crucial in mitigating the opportunistic behavior of managers in engaging in real activities manipulation and ensures the earnings quality. However, the analysis of the related party transaction revealed the negative impact on transparency that entrenched managers utilized related parties as a means of tunneling and drained the minority shareholder's interest for the benefit of majority shareholders. In this case, we observed that as family ownership increases, managers

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Section: Modelsupporting

confidence: 74%

Section: Methodsmentioning

confidence: 99%

Mediating Effect of Audit Committee Independence on the Link Between Firms Internal Governance Tunneling from Real Earnings Management

Ibrahim¹,

Mansor²,

Nasidi³

2020

IJARBSS

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“…This result coincides with previous studies on the effects of real activities earnings management on firm performance. Some studies previously proposed that employed discretionary expenses as a measure of REM and got the same result that real earnings management has a negative impact on future earnings (Ding et al, 2018;Kim, et al, 2018;Leggett, et al, 2016;Razzaque, et al, 2016;Tian, et al, 2018). Previous studies have shown that demonstrated the equivalent result by applying dimensions discretionary expenses and overproduction (Taylor and Xu, 2010;Wang, 2015).…”

Section: Resultsmentioning

confidence: 92%

“…Furthermore, reflecting the consequence of these variables on the dependent variable. These control variables are: Firm size (SIZE), measured as the natural logarithm of total assets, firm levarge (LEV), measured as total liabilities on total assets, tangible fixed asset (PPE), which is measured as the historical cost of tangible fixed assets on total assets, firm growth (GROWTH), calculated by the ratio of revenue year end minus revenue privious year and revenue privious year, Operating cash flow (CFO), defined by cash flow divided total assets at year-end (Gulzar, et al, 2018;Leggett, 2016;Razzaque, et al, 2016;Tian, et al, 2018).…”

Section: Controls Variablesmentioning

confidence: 99%

Untitled

2019

IJEEP

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This investigation analyses the influence of real activities earnings management on firm performance of the energy listed firms on Vietnam's stock market. Our data collection constitutes 29 energy companies on Vietnam stock markets (HNX and HOSE) in the period from 2010 to 2016. We used regression analysis in accordance with panel data, namely fixed effects model and random effects model. The results determine that real activity earnings management positively impacts on firm performance. This implies that increasing current sales activities will have a positive impact on current earnings. However, this may be pernicious to the company in the future. There is a positive association between firm size, cash from operating activities, growth opportunities and firm performance while firm leverage and tangible asset have a negative association. Research results are significant for regulators and investors in emerging markets.

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“…Family firms do not only give priority to financial return but also family existence (G omez-Mejía et al, 2007), so higher business performance (explicit performance) comes in second place after the good reputation of the family name (culture performance) (Hall and Nordqvist, 2008;Tabor et al, 2018). Previous studies (Achleitner et al, 2014;Ghaleb et al, 2020;Tian et al, 2018) find that family firms are less engaged in REM.…”

Section: Introductionmentioning

confidence: 99%

Managerial ability and real earnings management in family firms

Putra¹,

Mela²,

Putra³

2021

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Purpose This study aims to examine the effect of managerial ability on real earnings management (hereafter REM) in family firms. Design/methodology/approach The sample consists of 864 firms-years listed in the Indonesian Stock Exchange. REM is measured by abnormal activities. Managerial ability is measured by data envelopment analysis. Data analysis uses random-effect regression analysis. Findings Family firms reduce the possibility of higher ability managers to engage in REM. Compare to non-family firms, higher ability managers in family firms are more likely to engage in REM to improve future earnings. Research limitations/implications This research only uses efficiency score data envelopment analysis to measure managerial ability while the managerial ability is, by nature, multi-dimensional and unobservable. This research also does not find the role of professional Chief Executive Officer (hereafter CEO) in the family firms in REM behavior because does not consider the professional CEO motivation (e.g. compensation structure). Practical implications This research is expected to help family firms formulate managers' selection based on managerial ability. This research also is expected to help investors and creditors to put their funds in the family firms with higher ability managers that reduce earnings information distortion. Originality/value To the best of the author’s knowledge, this research is the first research that examines the managerial ability on REM in Indonesian family firms. This research also contributes to fil the findings gap in managerial ability and REM.

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Real earnings management in family firms: evidence from Chinese listed firms

Cited by 12 publications

References 0 publications

Mediating Effect of Audit Committee Independence on the Link Between Firms Internal Governance Tunneling from Real Earnings Management

Mediating Effect of Audit Committee Independence on the Link Between Firms Internal Governance Tunneling from Real Earnings Management

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Managerial ability and real earnings management in family firms

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