Institutional ownership stability and real earnings management
Institutional ownership stability and real earnings management
We examine the relationship between institutional ownership stability and real earnings management. Our findings indicate that firms held by more stable institutional owners experience lower real activities manipulation by limiting overproduction. We further examine how the stability in the shareholdings of pressure-sensitive and insensitive institutional investors affect target firms’ use of real earnings management, respectively. Unlike pressure-sensitive institutional investors, the stability in the share ownership of pressure-insensitive institutional investors (i.e., investment advisors, pension funds and endowments) mitigates target firms’ use of real earnings management. Overall, our results are consistent with the view that institutional investors presence acts as a monitor on target firms’ use of real earnings manipulation activities.
227-244
Sakaki, Hamid
469ee780-9237-4969-950c-6b96c2113d42
Jackson, Dave
4665bf03-ec72-4be7-b50d-e543533b8e64
Jory, Surendranath
2624eb24-850a-48f6-b3c6-c96749b87322
1 July 2017
Sakaki, Hamid
469ee780-9237-4969-950c-6b96c2113d42
Jackson, Dave
4665bf03-ec72-4be7-b50d-e543533b8e64
Jory, Surendranath
2624eb24-850a-48f6-b3c6-c96749b87322
Sakaki, Hamid, Jackson, Dave and Jory, Surendranath
(2017)
Institutional ownership stability and real earnings management.
Review of Quantitative Finance and Accounting, 49 (1), .
(doi:10.1007/s11156-016-0588-7).
Abstract
We examine the relationship between institutional ownership stability and real earnings management. Our findings indicate that firms held by more stable institutional owners experience lower real activities manipulation by limiting overproduction. We further examine how the stability in the shareholdings of pressure-sensitive and insensitive institutional investors affect target firms’ use of real earnings management, respectively. Unlike pressure-sensitive institutional investors, the stability in the share ownership of pressure-insensitive institutional investors (i.e., investment advisors, pension funds and endowments) mitigates target firms’ use of real earnings management. Overall, our results are consistent with the view that institutional investors presence acts as a monitor on target firms’ use of real earnings manipulation activities.
Text
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- Accepted Manuscript
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Accepted/In Press date: 30 September 2015
e-pub ahead of print date: 21 July 2016
Published date: 1 July 2017
Organisations:
Southampton Business School
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Local EPrints ID: 404172
URI: http://eprints.soton.ac.uk/id/eprint/404172
ISSN: 0924-865X
PURE UUID: 1e695675-3e02-4480-bf38-9f5fc785c597
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Date deposited: 03 Jan 2017 12:05
Last modified: 16 Mar 2024 04:14
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Author:
Hamid Sakaki
Author:
Dave Jackson
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