Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/43711
Title: Stock liquidity and managerial short-termism
Authors: Chen, Y 
Rhee, SG
Veeraraghavan, M
Zolotoy, L
Keywords: Corporate governance
Cost of capital
Earnings management
Managerial short-termism
Stock liquidity
Issue Date: 2015
Publisher: North-Holland
Source: Journal of banking & finance, 2015, v. 60, p. 44-59 How to cite?
Journal: Journal of banking & finance 
Abstract: We examine whether stock liquidity exacerbates or mitigates managerial short-termism. Utilizing earnings management as a proxy for managerial short-termism, we establish three major findings. First, firms with liquid stocks engage in less accrual-based and real earnings management. Second, the effect of stock liquidity on earnings management is amplified for firms with high levels of managerial pay-for-performance sensitivity. Third, the positive association between the intensity of earnings management and firm cost of capital is evident only for firms with low stock liquidity. Our findings are consistent with the threat of blockholder exit as the main governance channel through which stock liquidity discourages opportunistic earnings management and mitigates managerial short-termism.
URI: http://hdl.handle.net/10397/43711
ISSN: 0378-4266
DOI: 10.1016/j.jbankfin.2015.07.007
Appears in Collections:Journal/Magazine Article

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

SCOPUSTM   
Citations

1
Last Week
0
Last month
Citations as of Mar 5, 2017

Page view(s)

12
Last Week
0
Last month
Checked on Mar 19, 2017

Google ScholarTM

Check

Altmetric



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