FIRM CHARACTERISTICS AND EARNING MANAGEMENT: MODERATING ROLE OF OWNERSHIP STRUCTURE

Authors

  • Anam Ashiq School of Economics and Management, North China University of Water Resources and Electric Power, Zhengzhou, China
  • Zhang Guoxing School of Economics and Management, North China University of Water Resources and Electric Power, Zhengzhou, China
  • Aftab Hussain Tabassam Finance Department, University of Poonch, Azad Kashmir, Pakistan
  • Dr. Abdul Waheed Faculty of Management Sciences, Foundation University, Islamabad, Pakistan

Keywords:

Firm size, Leverage, Institutional ownership, concentrated ownership, Dictionary accruals, Pakistan Stock Exchange

Abstract

Prior studies examine the influence of Firm characteristics and ownership structure on earning management with competing interests. This research investigates the inconsistent results with a proposed framework through the interaction effect of ownership structure (concentrated ownership and institutional ownership) on the relationship between Firm characteristics (firm size and leverage) and earning management. The study carried out a test using a sample of 139 firms listed on Pakistan stock exchange from 2008-2019. This study's tests are carried out using the Stata programme and the fixed effect panel least squares regression model. The results indicates a negative and significant impact of concentrated ownership on earning management while, firm size, leverage and institutional ownership shows insignificant relationship with earning management. Additionally, the results seem to indicate that concentrated ownership diminished the influence of firm size on earning management. Moreover the relationship between business characteristics and earning management is also unaffected by institutional ownership.This is perhaps because most businesses in Pakistan are family-owned and concentrated.

References

Abdoli, M. (2011). Relation of Non Executive Directors and Ownership Concentration with Discretionary Accrual Accounting. Australian Journal of Business and Management Research, 7(4), 93.

Agrawal, A., & Mandelker, G. N. (1992). Shark repellents and the role of institutional investors in corporate governance. Managerial and Decision Economics, 73(1), 15-22.

Ahmad, M., Anjum, T., & Azeem, M. (2014). Investigating the impact of corporate governance on earning management in the presence of firm size; evidence from Pakistan. International Interdisciplinary Research Journal, 3(2), 84-90.

Ali, U., Noor, M., Khurshid, M. K., & Mahmood, A. (2015). Impact of firm size on earnings management: A study of textile sector of Pakistan. European Journal of Business and Management, 7(28).

Beatty, A., & Weber, J. (2003). The Effects of Debt Contracting on Voluntary Accounting Method Changes. The Accounting Review, 78(1), 119-142. https://doi.Org/10.2308/accr.2003.78.l.119

Downloads

Published

2022-09-30

How to Cite

Ashiq, A. ., Guoxing, Z. ., Hussain Tabassam, A. ., & Waheed, D. A. . (2022). FIRM CHARACTERISTICS AND EARNING MANAGEMENT: MODERATING ROLE OF OWNERSHIP STRUCTURE. The Journal of Contemporary Issues in Business and Government, 28(3), 964–976. Retrieved from https://cibgp.com/au/index.php/1323-6903/article/view/2428

Issue

Vol. 28 No. 3 (2022): The journal of contemporary issues in business and government

Section

Articles

License

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

You are free to:

  1. Share — copy and redistribute the material in any medium or format for any purpose, even commercially.
  2. Adapt — remix, transform, and build upon the material for any purpose, even commercially.
  3. The licensor cannot revoke these freedoms as long as you follow the license terms.

Under the following terms:

  1. Attribution — You must give appropriate credit , provide a link to the license, and indicate if changes were made . You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
  2. No additional restrictions — You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.

Notices:

You do not have to comply with the license for elements of the material in the public domain or where your use is permitted by an applicable exception or limitation .

No warranties are given. The license may not give you all of the permissions necessary for your intended use. For example, other rights such as publicity, privacy, or moral rights may limit how you use the material.