Institutional ownership and earnings quality: Evidence from China

Muhammad Jahangir Ali, Pallab Kumar Biswas, Larelle Chapple and Sriyalatha Kumarasinghe

Pacific-Basin Finance Journal, 2024, vol. 84, issue C

Abstract: We examine the impact of institutional ownership on earnings quality in China. We have employed two proxies of earnings quality: discretionary accruals and real earnings management. Using 19,743 firm-year observations from 2009 to 2017, we find that firms with higher institutional ownership are more likely to display higher earnings quality in lower discretionary accruals and lesser real activities manipulation. Our results are robust after controlling for endogeneity.

Keywords: Institutional ownership; Earnings quality; Accruals earnings management; Real earnings management; SOE; China (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:84:y:2024:i:c:s0927538x2400026x

DOI: 10.1016/j.pacfin.2024.102275

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