Download or read book Product Market Competition Information and Earnings Management written by Juan Santalo Mediavilla and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Product Market Competition and Earnings Management written by Guifeng Shi and published by . This book was released on 2018 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we employ a firm-level measure of product market competition constructed from the textual analysis of firms' 10-K filings and examine the relationship between managerial perceived competition pressure and firms' earnings management. We find that misstatement is positively related to product market competition, which is consistent with the notion that competition pressure increases managerial incentives to manage earnings. We also find that real earnings management is negatively related to product market competition. This suggests that real earnings management involves actions that decrease firms' competitiveness and is costly for firms under high competition pressure.

Download or read book Market Competition and Earnings Management written by Dalia Marciukaityte and published by . This book was released on 2009 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: We show that product market competition reduces agency problems by curtailing misleading earnings management and improving earnings informativeness. Using the Herfindahl-Hirschman Index from the Census of Manufacturers to proxy for product market competition, we find that firms in more competitive industries are less likely to engage in earnings management as measured by the absolute value of discretionary accruals and they are more likely to engage in earnings smoothing improving earnings informativeness about future cash flows. Earnings smoothing ratios are higher in competitive markets and the positive relation between current discretionary accruals and future changes in operating cash flows is stronger in such markets. Moreover, we find that firms in competitive industries have lower analysts' earnings forecast errors and lower dispersion of earnings forecasts, suggesting lower information asymmetry between managers and the market. Stock-price informativeness is also higher in more competitive markets. Furthermore, forced earnings restatements and security fraud lawsuits are less common in such markets. When firms engage in misleading upward earnings management, in a competitive market they are more harshly punished by the stock market when the market learns about the misleading management. We find that firms engaging in such management experience worse long-term stock performance in competitive markets. In addition, the negative market reaction to the announcements of forced earnings restatements is stronger in competitive markets. Overall, our findings suggest that product market competition is an effective mechanism improving the accuracy of financial reporting and reducing the information asymmetry between managers and the market. Moreover, product market competition achieves more accurate reporting without incurring substantial costs often associated with government regulations of financial reporting or corporate governance.

Download or read book Effect of Product Market Competition on Financial Reporting Quality written by Ji Woo Ryou and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Product markets are becoming increasingly more competitive. Because of an increased number of firms in U.S... product market, globalization, and FTA (Free Trade Agreement), both product market competition from potential entrants and existing rivals is growing. This dissertation examines the effect of growing product market competition on financial reporting quality. The first dissertation paper examines product market competition from potential entrants and existing rivals on earnings quality. Theory suggests that firms in intense competition may engage in real earnings management or accrual based earnings management. However, the differential direction of the effect of each type of product market competition is obscure and the sparse empirical literature is mixed. The results indicate that product market competition decreases real earnings management and partially decreases accrual based earnings management. Collectively, product market competition provides a disciplinary effect on managerial operating decisions and financial reporting quality. The second dissertation paper investigates how the type of product market competition affects Classification Shifting Earnings Management. This paper finds that firms in high product market competition have consistent core earnings levels and managers in high product market competition re less likely to use classification shifting earnings management through special items. Furthermore, firms in high product market competition have less unexpected core earnings and less usage of special items for classification shifting earnings management than firms in low product market competition. The third dissertation paper examines the impact of product market competition from existing rivals and potential entrants on corporate tax avoidance behavior. Also, the paper tests whether firms' industry competitive status affects corporate tax avoidance. Results finds that product market competition leads to more aggressive tax reporting behavior. Specifically, firms in high product market competition from existing rivals are more likely to engage in tax avoidance whereas firms in high product market competition from potential entrants less concern about avoid taxes. In firm level product market competition analysis, industry following firms are more likely to engage in tax avoidance than larger and industry leading firms. Collectively, this study find that it is actually smaller firms under competitive product market pressure that take advantage of the tax system.

Download or read book Sunk Costs and Market Structure written by John Sutton and published by MIT Press. This book was released on 1991 with total page 600 pages. Available in PDF, EPUB and Kindle. Book excerpt: Sunk Costs and Market Structure bridges the gap between the new generation of game theoretic models that has dominated the industrial organization literature over the past ten years and the traditional empirical agenda of the subject as embodied in the structure-conduct-performance paradigm developed by Joe S. Bain and his successors.

Download or read book The Impact of Product Market Competition on Earnings Quality written by Ho-yin Paul Man and published by . This book was released on 2010 with total page 224 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Do Managers Manipulate Gross Profits written by and published by . This book was released on 2016 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Product Market Competition and Earnings Quality written by Ying Guo and published by . This book was released on 2015 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: The economic literature shows that production market competition could have nonlinear effects on corporate behaviors, such as management effort and innovative activities. We extend the literature by focusing on the influence of product market competition on earnings quality. We propose and document an inverted U-shape relation between earnings quality and product market competition. Earnings quality increases with competition in the lower range of competition and declines with it when competition is intense. The results are robust to assorted measures of earnings quality and competition, and treatment of endogeneity.

Download or read book Product Market Competition and Agency Costs written by Jennifer Jane Baggs and published by . This book was released on 2006 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Economists have long held the belief that competition improves efficiency. One of the mechanisms suggested is that product market competition alleviates agency costs, which in turn many enable firms to induce higher effort and greater efficiency from their managers. In this way, competition mitigates what Leibenstein (1966) called 'X-inefficiencies.' Despite growing interest, an unambiguous theoretical formulation for this 'vague suspicion' has proved difficult to obtain. In this paper we examine the impact of competition on efficiency both theoretically and empirically. The main theoretical contribution of this paper is to show that product market competition can have a direct, and ambiguously positive effect on managerial incentives."--Unedited text from document.

Download or read book Competition Capital Market Feedback and Earnings Management written by Jongsub Lee and published by . This book was released on 2016 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using economic deregulation as a quasi-natural experiment for increasing product market competition, we find increases in earnings manipulation and accounting frauds following deregulation. This “dark-side” of product market competition is particularly evident for deregulated firms in high market-to-book industries, where we find evidence of short-termism in the capital market. We further find that firms in these industries, if actively manage earnings, tend to make more acquisitions and have higher survival rates. Overall, our results are largely consistent with Shleifer (2004), who predicts an important interplay between product market competition and capital market valuation feedback that could induce misbehaving incentives among firms in competitive industries.

Download or read book Corporate Payout Policy written by Harry DeAngelo and published by Now Publishers Inc. This book was released on 2009 with total page 215 pages. Available in PDF, EPUB and Kindle. Book excerpt: Corporate Payout Policy synthesizes the academic research on payout policy and explains "how much, when, and how". That is (i) the overall value of payouts over the life of the enterprise, (ii) the time profile of a firm's payouts across periods, and (iii) the form of those payouts. The authors conclude that today's theory does a good job of explaining the general features of corporate payout policies, but some important gaps remain. So while our emphasis is to clarify "what we know" about payout policy, the authors also identify a number of interesting unresolved questions for future research. Corporate Payout Policy discusses potential influences on corporate payout policy including managerial use of payouts to signal future earnings to outside investors, individuals' behavioral biases that lead to sentiment-based demands for distributions, the desire of large block stockholders to maintain corporate control, and personal tax incentives to defer payouts. The authors highlight four important "carry-away" points: the literature's focus on whether repurchases will (or should) drive out dividends is misplaced because it implicitly assumes that a single payout vehicle is optimal; extant empirical evidence is strongly incompatible with the notion that the primary purpose of dividends is to signal managers' views of future earnings to outside investors; over-confidence on the part of managers is potentially a first-order determinant of payout policy because it induces them to over-retain resources to invest in dubious projects and so behavioral biases may, in fact, turn out to be more important than agency costs in explaining why investors pressure firms to accelerate payouts; the influence of controlling stockholders on payout policy --- particularly in non-U.S. firms, where controlling stockholders are common --- is a promising area for future research. Corporate Payout Policy is required reading for both researchers and practitioners interested in understanding this central topic in corporate finance and governance.

Download or read book The Effects of Competition written by George Symeonidis and published by MIT Press. This book was released on 2002-01-18 with total page 558 pages. Available in PDF, EPUB and Kindle. Book excerpt: A theoretical and empirical study of the effects of competition across a broad range of industries. Policies to promote competition are high on the political agenda worldwide. But in a constantly changing marketplace, the effects of more intense competition on firm conduct, market structure, and industry performance are often hard to distinguish. This study combines game-theoretic models with empirical evidence from a "natural experiment" of policy reform. The introduction in the United Kingdom of the 1956 Restrictive Trade Practices Act led to the registration and subsequent abolition of explicit restrictive agreements between firms and the intensification of price competition across a range of manufacturing industries. An equally large number of industries were not affected by the legislation. Using data from before and after the 1956 act, this book compares the two groups of industries to determine the effect of price competition on concentration, firm and plant numbers, profitability, advertising intensity, and innovation. The book avoids two problems common to empirical studies of competition: how to measure the intensity of competition and how to unravel the links between competition and other variables. Because the change in the intensity of competition had an external cause, there is no need to measure the intensity of competition directly, and it is possible to identify one-way causal effects when estimating the impact of competition. The book also examines issues such as the industries in which collusion is more likely to occur; the effect of cartels and cartel laws on market structure and profitability; the links between competition, advertising, and innovation; and the constraints on the exercise of merger and antitrust policies.

Download or read book Earnings Management written by Joshua Ronen and published by Springer Science & Business Media. This book was released on 2008-08-06 with total page 587 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is a study of earnings management, aimed at scholars and professionals in accounting, finance, economics, and law. The authors address research questions including: Why are earnings so important that firms feel compelled to manipulate them? What set of circumstances will induce earnings management? How will the interaction among management, boards of directors, investors, employees, suppliers, customers and regulators affect earnings management? How to design empirical research addressing earnings management? What are the limitations and strengths of current empirical models?

Download or read book Product Market Competition and Managerial Disclosure of Earnings Forecasts written by Ying Huang and published by . This book was released on 2016 with total page 1 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the effect of product market competition on managerial disclosure of earnings forecasts using large reductions in U.S. import tariff rates to identify an exogenous increase in competition for domestic firms in U.S. product markets. Our difference-in-difference estimations show that tariff reductions are associated with a significant decrease in management forecasts of annual earnings by U.S. domestic firms. Further, this decrease is more pronounced when the tariff rate reduction triggers a greater increase in imports and when the forecasts are likely to incur higher proprietary costs. Our findings are consistent with competition from existing rivals reducing voluntary disclosure through increased proprietary costs.

Download or read book Corporate Stewardship written by Susan Albers Mohrman and published by Routledge. This book was released on 2017-09-29 with total page 284 pages. Available in PDF, EPUB and Kindle. Book excerpt: Stewardship entails a profound understanding and acceptance of the challenges that result from the organization’s interdependence with the societal and ecological contexts in which it operates—and of what it takes to embrace the challenges to be a force for building a viable future. This book dares to ask ‘why’ business leaders should embrace stewardship in the current market where profit reigns supreme. A shift in approach represents fundamental change for the corporate world, and even the most advanced corporations consider themselves to be in the starting block of this transition. The book sets out the practical ways in which corporate stewardship can be achieved through embedding new approaches across the different functions of a business. This book, written by the leading thinkers in sustainability research, provides practical guidance on how companies can resolve the paradoxical challenges they face. How can they be at the same time profitable and responsible, effective and ethical, sustainable and adaptable? It explores what businesses are doing, what they can and should do to effectively respond to external challenges, and focuses on how leaders can create cultures, strategies, and designs far beyond “business as usual”.Stewards must not only make proper current use of that which they hold in trust, they also must leave it in better condition for use by future generations. Corporate Stewardship challenges managers, executives, and directors of global corporations to think and act as stewards of both their organizations and the physical and social environments in which they operate.

Download or read book The Effect of Competition on Real Earnings Management A Re examination written by David Yeboah and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the effect of competition in the product and labour markets on real earnings management (REM). REM is accomplished by firms changing investing or operating decisions primarily to increase current period earnings and can affect future cash flows negatively. Using data from Standard and Poor's 1500 index firms from 1992 to 2015, I find strong support for the prediction that managers in more competitive labour markets are more inclined to use REM activities. However, I find little evidence that firms in more competitive product markets will reduce their engagement in REM activities. The results from the interaction of these two markets show that managers are more inclined to use REM activities whenever they face high labour market competition. This suggests that managers' primary concern as they make REM decisions is the impact on their career.

Download or read book Introduction to Earnings Management written by Malek El Diri and published by Springer. This book was released on 2017-08-20 with total page 120 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides researchers and scholars with a comprehensive and up-to-date analysis of earnings management theory and literature. While it raises new questions for future research, the book can be also helpful to other parties who rely on financial reporting in making decisions like regulators, policy makers, shareholders, investors, and gatekeepers e.g., auditors and analysts. The book summarizes the existing literature and provides insight into new areas of research such as the differences between earnings management, fraud, earnings quality, impression management, and expectation management; the trade-off between earnings management activities; the special measures of earnings management; and the classification of earnings management motives based on a comprehensive theoretical framework.