Corporate governance and earnings management in concentrated marketsMalek El Diri, Costas Lambrinoudakis and Mohammad Alhadab Journal of Business Research, 2020, vol. 108, issue C, 291-306 Abstract: This study examines the difference between high and low concentrated markets in using accrual and real earnings management and the role of corporate governance in mitigating such activities across the two types of markets. We find that firms operating in concentrated markets use more accrual and real earnings management compared to those in non-concentrated markets. Furthermore, we find evidence that corporate governance, in the form of quality board characteristics, is more effective in mitigating earnings management in non-concentrated markets. In contrast, corporate governance in concentrated markets drives managers to substitute accrual with real earnings management as the latter is less easily detectable and its long-term negative consequences on firm value are likely to be mitigated by the higher competitive power of firms in concentrated markets. The findings of this study are potentially useful to regulators in enhancing the legitimacy of corporate governance in concentrated markets. Keywords: Corporate governance; Board of directors; Accrual earnings management; Real earnings management; Market concentration (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:108:y:2020:i:c:p:291-306 DOI: 10.1016/j.jbusres.2019.11.013 Access Statistics for this article Journal of Business Research is currently edited by A. G. Woodside More articles in Journal of Business Research from Elsevier |
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