Competitive advantage, ownership structure, and real earnings management: the role of business group dominance in emerging markets
Competitive advantage, ownership structure, and real earnings management: the role of business group dominance in emerging markets
This study explores the relationship between competitive advantage, ownership structure, and real earnings management (REM) in the Indian business context. Using a panel dataset spanning sixteen years (2004–2019), we find that firms affiliated with business groups engage in higher levels of REM compared to standalone firms. The analysis reveals that within business group-owned firms, REM is higher when competitive advantage is low but decreases as competitive advantage increases. Additionally, our study introduces an industry dominance index and demonstrates that business group dominance moderates the relationship between competitive rivalry and REM. Specifically, industries dominated by business groups exhibit increased REM when competitive rivalry is low and reduced REM when rivalry is high. These findings highlight the complex interplay between firm-level characteristics, industry dynamics, and ownership structure in influencing real earnings management practices in emerging markets.
Competitive advantage, Competitive rivalry, India, Ownership identity, Real earnings management
Ajay, Ranjitha
dfc07a0c-6018-4503-8e8f-495ebdfdea84
Srinivasan, Suresh
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Rakesh, Surendranath
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Ajay, Ranjitha
dfc07a0c-6018-4503-8e8f-495ebdfdea84
Srinivasan, Suresh
f04326e6-47da-4fd4-b569-d6ce32d92f49
Rakesh, Surendranath
2624eb24-850a-48f6-b3c6-c96749b87322
Ajay, Ranjitha, Srinivasan, Suresh and Rakesh, Surendranath
(2026)
Competitive advantage, ownership structure, and real earnings management: the role of business group dominance in emerging markets.
Asia Pacific Journal of Management.
(doi:10.1007/s10490-025-10106-5).
Abstract
This study explores the relationship between competitive advantage, ownership structure, and real earnings management (REM) in the Indian business context. Using a panel dataset spanning sixteen years (2004–2019), we find that firms affiliated with business groups engage in higher levels of REM compared to standalone firms. The analysis reveals that within business group-owned firms, REM is higher when competitive advantage is low but decreases as competitive advantage increases. Additionally, our study introduces an industry dominance index and demonstrates that business group dominance moderates the relationship between competitive rivalry and REM. Specifically, industries dominated by business groups exhibit increased REM when competitive rivalry is low and reduced REM when rivalry is high. These findings highlight the complex interplay between firm-level characteristics, industry dynamics, and ownership structure in influencing real earnings management practices in emerging markets.
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Accepted/In Press date: 3 December 2025
e-pub ahead of print date: 13 February 2026
Keywords:
Competitive advantage, Competitive rivalry, India, Ownership identity, Real earnings management
Identifiers
Local EPrints ID: 510927
URI: http://eprints.soton.ac.uk/id/eprint/510927
ISSN: 0217-4561
PURE UUID: fe11588d-d4ab-40cd-924f-d6d32b17284b
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Date deposited: 27 Apr 2026 16:37
Last modified: 02 May 2026 01:49
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Author:
Ranjitha Ajay
Author:
Suresh Srinivasan
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