Internationalization and earnings management: Evidence from China

Wei Han and Di Wu

Finance Research Letters, 2023, vol. 53, issue C

Abstract: Firm internationalization is an important strategy for enhancing competitive advantage. This study investigates the effects of internationalization on firm earnings management behavior by detecting multinational corporations’ earnings manipulation. No substitute effect of accrual earnings management and real earnings management is observed in the multinational operating enterprises’ earnings management activities. We find that internationalization increases firms’ motivation to manage accrual earnings. The higher the degree of multinational operation, the more inclined the firm is to manipulate accrual income to achieve its goals.

Keywords: Multinational operations; Accrual earnings management; True earnings management; System quality (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:53:y:2023:i:c:s1544612322007656

DOI: 10.1016/j.frl.2022.103589

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