Real earnings management in innovative firms: Does CEO profile make a difference?

Kouaib, Amel; Jarboui, Anis

doi:10.1016/j.jbef.2016.09.002

Cited by 40 publications

(31 citation statements)

References 58 publications

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“…Previous studies similarly provide that managers make trade-offs when deciding whether to disclose company information about an uncertain future. However, as overconfident managers overestimate their own knowledge of the future, it makes sense to remember that overconfident managers may be motivated to take strategic adventures (Heaton et al, 2011;Kouaib and Jarboui 2016a, 2016bChyz et al, 2019). Hur et al (2019) found that overconfident CEOs invest more in innovation to boost research and development (R&D) projects.…”

Section: Ceo Overconfidence and Corporate Social Responsibilitymentioning

confidence: 99%

Do CEO overconfidence and narcissism affect corporate social responsibility in the UK listed companies? The moderating role of corporate governance

Bouzouitina

Mouakhar²,

Jarboui

2021

SBR

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Purpose This paper aims to examine the effect of two CEO characteristics, namely, narcissism and overconfidence on corporate social responsibility (CSR) and the moderating effect of corporate governance (CG) mechanisms in the UK. Design/methodology/approach Using a sample of 2,360 UK firms listed on the FTSE 400 index for the years 2010–2017, the feasible generalized least squares method was applied to test the hypotheses developed. Findings The finding argues that CEO narcissism and overconfidence positively affect CSR. In addition, this paper found that CG effectiveness moderates the CEO’s CSR behavior. Research limitations/implications This research is subjected to two limitations. First, this study used different measures to proxy for CEO narcissism and overconfidence. However, other measures are not included owing to the difficulty to collect data regarding these measures. Second, this study includes only CSR performance instead of all other dimensions and categories of CSR. These limitations do not change the conclusions of this research, and they may provide guidance for further investigations. Practical implications Given that the CEOs psychological and behavioral features are critical in understanding CSR, shareholders and boards of directors should incorporate the behavioral aspects of narcissistic and overconfident CEOs in the design of CSR strategy. Originality/value This study emphasizes the importance of top executives’ psychological characteristics for CSR, which is a key application and complements the “upper echelons theory” and fills the research gap in the literature. This is one of the few studies that investigate the interaction between CG, CEO profile and CSR.

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Section: Ceo Overconfidence and Corporate Social Responsibilitymentioning

confidence: 99%

Do CEO overconfidence and narcissism affect corporate social responsibility in the UK listed companies? The moderating role of corporate governance

Bouzouitina

Mouakhar²,

Jarboui

2021

SBR

Self Cite

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“…Ali and Zhang (2014) found a significantly positive link between CEOs' tenure and EM. Kouaib and Jarboui (2016) reported that CEOs were more likely to engage in REM by reducing research and development (R&D) expenses in their early years of service than in their year of retirement. Furthermore, Cho, Choi, and Kwon (2019) found a positive and significant link between CEOs' tenure and REM among Korean listed companies from 2000 to 2015.…”

Section: Ceos' Tenurementioning

confidence: 99%

CEO Characteristics and Real Earnings Management in Jordan

Alhmood¹,

Shaari²,

Al‐Dhamari³

2020

IJFR

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The Chief Executive Officer (CEOs) tends to be the most influential member of a corporation as they exert control over corporate decisions such as financial disclosure, board structure, and company performance in ensuring enhanced corporate performance and earnings. The issue of earnings management (EM) that has captured the attention of researchers may be among the most critical factors that are linked to financial statement manipulation. Therefore, the current study explored the effects of the personal characteristics of CEOs on real earnings management (REM) practices in Jordan. Data of 58 companies listed on the Amman Stock Exchange for six years from 2013 to 2018 were utilised to achieve this study’s objectives. The results of this study revealed that CEOs’ experience had a significantly positive association with REM. Meanwhile, CEOs’ tenure had no impact on REM among Jordanian firms. Also, the results exposed the presence of a significantly negative association between CEO duality and REM. Finally, CEOs’ political connection was found to have a significantly positive association with REM. This study offers empirical evidence on the effect of CEO characteristics on REM and how such characteristics can lead to exploitation, which brings an impact on the financial reporting quality.

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“…Recent studies indicate that the CEO plays a significant role in shaping the accounting outcome of the reporting entity (Habib and Hossain, 2013;Jiang et al, 2013;Kouaib and Jarboui, 2016). There is also evidence that CEO attributes such as ownership, financial expertise and tenure assist the CEO to maintain the high-quality financial report.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

CEO discretion, political connection and real earnings management in Nigeria

Sani¹,

Latif

Al‐Dhamari

2020

MRR

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Purpose The purpose of this paper is to examine the influence of CEO discretion on the real earnings management and to explore whether the discretion of the CEO to ensure accurate and reliable financial reports is influenced by the political connection of board members. Design/methodology/approach Using the generalized method of movement to control the potential endogeneity on the sample of listed companies in Nigeria, the study conducted several checks using Driscoll–Kraay panel data regression with standard error to robust the main findings. Findings The paper provides evidence that CEO Discretion reduces the tendency of real earnings management and improve the reporting quality. However, the CEO’s discretion to provide reliable financial reports and to reduce the likely earnings manipulation is overturn by the presence of politically connected directors. Originality/value Existing studies on CEO attributes and earnings management in Nigeria fail to explain why CEOs were involved in corporate financial scandals. This paper suggests that the presence of politically connected directors is what override and upturn the CEO discretion to dwell into real earnings manipulations. Prior studies measured political connection using a dummy variable (Chaney et al., 2011; Osazuwa et al., 2016; Tee, 2018), this paper measured political connection using the proportion of politically connected directors. This is on the idea that the presence of more politically connected directors may give them the power to override the CEOs decision.

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Real earnings management in innovative firms: Does CEO profile make a difference?

Cited by 40 publications

References 58 publications

Do CEO overconfidence and narcissism affect corporate social responsibility in the UK listed companies? The moderating role of corporate governance

Do CEO overconfidence and narcissism affect corporate social responsibility in the UK listed companies? The moderating role of corporate governance

CEO Characteristics and Real Earnings Management in Jordan

CEO discretion, political connection and real earnings management in Nigeria

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