Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/18712
Title: Ownership structure, business group affiliation, listing status, and earnings management : evidence from Korea
Authors: Kim, JB
Yi, CH
Keywords: Business group
Corporate governance
Earnings management
Listing status
Issue Date: 2006
Publisher: Canadian Academic Accounting Assoc
Source: Contemporary accounting research, 2006, v. 23, no. 2, p. 427-464 How to cite?
Journal: Contemporary Accounting Research 
Abstract: Using a large sample of both publicly traded and privately held firms in South Korea (hereafter "Korea"), we investigate whether, and how, the deviation of controlling shareholders' control from ownership, business group affiliation, and listing status differentially affect the extent of earnings management. Our study yields three major findings. First, we find that as the control-ownership disparity becomes larger, controlling shareholders tend to engage more in opportunistic earnings management to hide their behavior and avoid adverse consequences such as disciplinary action. The result of our full-model regression reveals that an increase in the control-ownership wedge by I percent leads to an increase in the magnitude of (unsigned) discretionary accruals by 1.3 percent of lagged total assets, ceteris paribus. Second, we find that for our full-model regression, the magnitude of (unsigned) discretionary accruals is greater for group-affiliated firms than for nonaffiliated firms by 0.8 percent of lagged total assets. This result suggests that business group affiliation provides controlling shareholders with more incentives and opportunities for earnings management. Finally, we find that for our full-model regression, the magnitude of (unsigned) discretionary accruals is greater for publicly traded firms than for privately held firms by 1.2 percent of lagged total assets. This result supports the notion that stock markets create incentives for public firms to manage reported earnings to satisfy the expectations of various market participants that are often expressed in earnings numbers.
URI: http://hdl.handle.net/10397/18712
ISSN: 0823-9150
DOI: 10.1506/7T5B-72FV-MHJV-E697
Appears in Collections:Journal/Magazine Article

Access
View full-text via PolyU eLinks SFX Query
Show full item record

SCOPUSTM   
Citations

93
Last Week
12
Last month
2
Citations as of Sep 17, 2017

WEB OF SCIENCETM
Citations

75
Last Week
0
Last month
1
Citations as of Sep 14, 2017

Page view(s)

50
Last Week
7
Last month
Checked on Sep 18, 2017

Google ScholarTM

Check

Altmetric



Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.