Please use this identifier to cite or link to this item:
http://hdl.handle.net/10397/93352
Title: | The effect of shareholder activism on earnings management : evidence from shareholder proposals | Authors: | Ng, J Wu, H Zhai, W Zhao, J |
Issue Date: | Aug-2021 | Source: | Journal of corporate finance, Aug. 2021, v. 69, 102014 | Abstract: | We find that in general, both accrual-based and real earnings management decrease after the passage of shareholder-sponsored governance proposals. However, when accounting for the type of proposal, we observe significant heterogeneity in the effects on earnings management. Specifically, proposals focused on changing the governance structure (e.g., board independence) lead to reductions in both types of earnings management, whereas proposals specifically targeted at improving financial reporting quality lead to decreased accrual-based earnings management but increased real earnings management. The results suggest that constraints on accrual-based earnings management induce a shift toward real earnings management. Our paper indicates that the nature of the shareholder proposal has a significant impact on shareholder intervention. | Keywords: | Accrual-based earnings management Real activities manipulation Shareholder activism Shareholder proposals |
Publisher: | Elsevier | Journal: | Journal of corporate finance | ISSN: | 0929-1199 | EISSN: | 1872-6313 | DOI: | 10.1016/j.jcorpfin.2021.102014 | Rights: | © 2021 Published by Elsevier B.V. © 2021. This manuscript version is made available under the CC-BY-NC-ND 4.0 license https://creativecommons.org/licenses/by-nc-nd/4.0/ The following publication Ng, J., Wu, H., Zhai, W., & Zhao, J. (2021). The effect of shareholder activism on earnings management: Evidence from shareholder proposals. Journal of Corporate Finance, 69, 102014 is available at https://doi.org/10.1016/j.jcorpfin.2021.102014 |
Appears in Collections: | Journal/Magazine Article |
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Ng_Effect_Shareholder_Activism.pdf | Pre-Published version | 1.02 MB | Adobe PDF | View/Open |
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