Earnings Management and Stock Market Listing

Hyonok Kim, Yukihiro Yasuda and 行宏 安田

No G-1-24, Working Paper Series from Hitotsubashi University Center for Financial Research

Abstract: We provide the first large sample comparison of earnings management by Japanese listed and unlisted firms. Based on the theoretical predictions by Stein (1989), we empirically examine whether managers’ myopic behaviors exist through inflating current earnings at the expense of long-term earnings. We find that listed firms are more likely to engage in earnings management. We also find that firm managers are more likely to manage earnings as the information content of current earnings about future earnings (stock price) increases. More importantly, we note that this manipulation is pronounced only for listed firms. This is the first study that empirically shows the market pressure for raising stock price induces earnings manipulation.

Keywords: Earnings Management; Myopic; Short-termism; Stock market pressure; Unlisted firms; Private firms (search for similar items in EconPapers)
JEL-codes: D80 G21 G31 G32 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2020-07-21
New Economics Papers: this item is included in nep-cfn, nep-fmk and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/31299/070hcfrWP_1_024.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hit:hcfrwp:g-1-24

Access Statistics for this paper

More papers in Working Paper Series from Hitotsubashi University Center for Financial Research Contact information at EDIRC.
Bibliographic data for series maintained by Digital Resources Section, Hitotsubashi University Library ().