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Evidence for the Existence of Downward Real Earnings Management

Francis, Bill B. - 2015

Prior studies of real-activity earnings management (REM) focus on earnings-inflating abnormal activities. We seek to establish the existence of downward REM by investigating several corporate events in which managers have incentives to temporarily deflate market valuations. Specifically, we...

Persistent link: https://www.econbiz.de/10013017293

Earnings management and theoretical adjustment in capital structure performance pattern : evidence from APTA economies

Shoaib, Adnan; Siddiqui, Muhammad Ayub - In: Borsa Istanbul Review 22 (2022) 1, pp. 20-36

the trade-off theory or the pecking-order theory. Our results are consistent with agency theory only through managers …-off or pecking-order theory, as seen in patterns in the relationship between the capital structure and firm performance …, whereas agency theory holds only after external intervention by managers in terms of earnings management. …

Persistent link: https://www.econbiz.de/10012817965

Do Creditors Prefer Smooth Earnings? Evidence from European Private Firms

Gassen, Joachim - 2015

We investigate the interplay between creditor financing and the smoothness of earnings reported by European private firms and document how heterogeneous debt-contracting infrastructures across Europe moderate this relation. Most European private firms are owner-manager run enterprises with...

Persistent link: https://www.econbiz.de/10013032464

Estimating the Equity Risk Premium with Time-Series Forecasts of Earnings

Allee, Kristian D. - 2011

The size of the equity risk premium remains an unanswered question in the accounting and finance literature. This study proposes a new approach to reverse-engineer the equity risk premium, distinct from prior research, in that it does not rely on analysts’ forecasts to proxy for the market’s...

Persistent link: https://www.econbiz.de/10014195500

Managerial Incentives Explanation of Equity Carve-Outs Initial Returns

Seistrajkova, Biljana - 2017

This paper studies the first day return of 227 carve-outs during 1996-2013. I find that the first day return of newly issued subsidiary stocks is explained by the reporting distortions in the pre IPO period, conditioned on whether the executives and directors of the subsidiary received stock...

Persistent link: https://www.econbiz.de/10012970504

Estimating the Equity Risk Premium with Time-Series Forecasts of Earnings

Allee, Kristian D. - 2011

Persistent link: https://www.econbiz.de/10013133582

Mitigating Incentive Conflicts in Inter-Firm Relationships : Evidence from Long-Term Supply Contracts

Costello, Anna M. - 2013

Using a sample of long-term supply contracts collected from SEC filings, I show that hold-up concerns and information asymmetry are important determinants of contract design. Asymmetric information between buyers and suppliers leads to shorter term contracts. However, when longer duration...

Persistent link: https://www.econbiz.de/10013086012

Cross-Country Evidence on the Relation between Capital Gains Taxes, Risk, and Expected Returns

Hail, Luzi - 2016

This study empirically examines the role of risk sharing between taxable investors and the government on the relation between capital gains taxes and expected returns. Specifically, using an international panel from 26 countries over the period 1990 to 2004, we find evidence that the general...

Persistent link: https://www.econbiz.de/10013006684

Private Ownership and the Cost of Public Debt : Evidence from the Bond Market

Badertscher, Brad A. - 2017

A number of studies have examined the effect of public and private ownership on the cost of debt and conclude that the cost of debt of privately owned firms is higher, driven mainly by the poorer information environment in which these firms operate. We extend this strand of research in two ways....

Persistent link: https://www.econbiz.de/10012972269

Managerial Equity Holdings and Income Smoothing Incentives

Shu, Sydney Qing - 2017

Our study explores how managerial stock holdings and option holdings affect CEOs' income smoothing incentives. Given the different roles of stock holdings and option holdings in solving agency problems, managers may smooth past earnings using discretionary accruals for the purpose of revealing...

Persistent link: https://www.econbiz.de/10012971185