Does corporate diversification exacerbate or mitigate earnings management?: An empirical analysis

International Review of Financial Analysis

Volumn 17, Issue 5, 2008, Pages 1087-1109

  Jiraporn, Pornsit ^a   Kim, Young Sang ^b   Mathur, Ike ^c  

^a PENNSYLVANIA STATE UNIVERSITY   (United States)

^b NORTHERN KENTUCKY UNIVERSITY   (United States)

^c SOUTHERN ILLINOIS UNIVERSITY   (United States)

Author keywords

Diversification; Earnings management; Information asymmetry

Indexed keywords

EID: 54849421114     PISSN: 10575219     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.irfa.2007.10.001     Document Type: Article

References (31)

1. Aggarwal R.K., and Samwick A.A. Performance incentives within firms: The effect of managerial responsibility. Journal of Finance 58 (2002) 1613-1650
2. Barton J. Does the use of financial derivatives affect earnings management decisions?. The Accounting Review 76 (2001) 1-26
3. Bartov E., Gul F.A., and Tsui J.S.L. Discretionary-accruals models and audit qualifications. Journal of Accounting and Economics 30 (2001) 421-452
4. Becker C.L., Defond M.L., Jiambalvo J., and Subramanyam K.R. The effect of audit quality on earnings management. Contemporary Accounting Research 15 (1998) 1-24
5. Berger P.G., and Ofek E. Diversification's effect on firm value. Journal of Financial Economics 37 (1995) 39-65
6. Davidson W.N., Jiraporn P., Kim Y.S., and Nemac C. Earnings management following duality-creating successions: Ethnostatistics, impression management and agency theory. Academy of Management Journal 47 (2004) 267-275
7. Dechow P.M., Sloan R.G., and Sweeney A.P. Detecting earnings management. Journal of Accounting Research 34 (1995) 193-226
8. Denis D.J., Denis D.K., and Sarin A. Agency problems, equity ownership, and corporate diversification. Journal of Finance 52 (1997) 135-160
9. Guay W.R., Kothari S.P., and Watts R. A market based evaluation of discretionary accruals models. Journal of Accounting Research 34 (1996) 83-105
10. Hyland D., and Diltz D. Why firms diversify?: An empirical examination. Financial Management 31 (2002) 51-82
11. Jensen M.C. Agency costs of free cash flow, corporate finance, and takeovers. American Economic Review 76 (1986) 323-329
12. Jensen M.C., and Murphy K. Performance pay and top management incentives. Journal of Political Economy 98 (1990) 225-264
13. Jones J.J. Earnings management during import relief investigations. Journal of Accounting Research 29 (1991) 193-228
14. Klein A. Audit committee, board of director characteristics, and earnings management. Journal of Accounting and Economics 33 (2002) 375-400
15. Krishnaswami S., and Subramaniam V. Information asymmetry, valuation and the corporate spin-off decision. Journal of Financial Economics 53 (1999) 73-113
16. Lang L.H.P., and Stulz R. Tobin's q, corporate diversification and firm performance. Journal of Political Economy 102 (1994) 1248-1280
17. Lev B. On the usefulness of earnings and earnings research. Journal of Accounting Research 27 (1989) 153-192
18. May D.O. Do managerial motives influence risk reduction strategies?. Journal of Finance 50 (1995) 1291-1309
19. Perry S., and Williams T. Earnings management preceding management buyout offers. Journal of Accounting and Economics 18 (1994) 157-179
20. Servaes H. The value of diversification during the conglomerate merger wave. Journal of Finance 51 (1996) 1201-1225
21. Shleifer A., and Vishny R. Management entrenchment, the case of manager-specific investments. Journal of Financial Economics 25 (1989) 123-139
22. Stulz R.M. Managerial discretion and optimal financing policies. Journal of Financial Economics 26 (1990) 3-27
23. Subramanyam K.R. The pricing of discretionary accruals. Journal of Accounting and Economics 22 (1996) 249-281
24. Teoh S.H., Welch I., and Wong T.J. Earnings management and the long-run market performance of initial public offerings. Journal of Finance 53 (1998) 1935-1975
25. Teoh S.H., Welch I., and Wong T.J. Earnings management and the long-run market performance of seasoned equity offerings. Journal of Financial Economics 50 (1998) 63-90
26. Thomas S. Firm diversification and asymmetric information: Evidence from analysts' forecasts and earnings announcements'. Journal of Financial Economics 64 (2002) 373-396
27. Villalonga B. Does diversification cause the "diversification discount". Financial Management 33 (2004) 5-28
28. Warfield T.D., Wild J.J., and Wild K.L. Managerial ownership, accounting choices and informativeness of earnings. Journal of Accounting and Economics 20 (1995) 61-92
29. Whited T. Is it efficient investment that causes the diversification discount?. Journal of Finance 56 (2001) 1667-1692
30. Wu W. Management buyouts and earnings management. Journal of Accounting, Auditing & Finance 12 (1997) 373-389
31. Xie B., Davidson W.N., and DaDalt P. Earnings management and corporate governance: The role of board and the audit committee. Journal of Corporate Finance 9 (2003) 295-316