CEO Dynamics and Real Earnings Management: A Gender Diversity Perspective from Sub-Saharan Africa

Onyinyechi Precious Edeh (), Ovbe Simon Akpadaka, Musa Adeiza Farouk and Musa Inuwa Fodio
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Onyinyechi Precious Edeh: Auditing & Forensic Accounting Department, College of Public Sector Accounting, ANAN University, Kwall 930113, Nigeria
Ovbe Simon Akpadaka: Financial Management Department, College of Private Sector Accounting, ANAN University, Kwall 930113, Nigeria
Musa Adeiza Farouk: Management Accounting Department, College of Private Sector Accounting, ANAN University, Kwall 930113, Nigeria
Musa Inuwa Fodio: Vice Chancellor, ANAN University, Kwall 930113, Nigeria

JRFM, 2025, vol. 18, issue 7, 1-27

Abstract: Sub-Saharan Africa’s (SSA) corporate environment, like many emerging markets, is marked by institutional voids, weak oversight structures, and patriarchal leadership norms, which heighten the risk of real earnings management (REM). This study examines how CEO characteristics and audit committee gender diversity influence REM among listed manufacturing firms in 12 SSA countries from 2012 to 2023. Anchored in agency theory and Upper Echelon Theory, this study draws on 1189 firm-year observations and employs Pooled OLS, Random Effects, Fixed Effects, Feasible Generalised Least Squares (FGLS), and System GMM estimators. Findings show that female CEOs are consistently associated with lower REM, underscoring the ethical conservatism linked to gender-inclusive leadership. CEO ownership shows a positive and significant association with REM in System GMM, though findings vary across models, indicating potential institutional effects. The firm size is negatively and significantly related to REM in Pooled, RE, and FGLS models, but becomes nonsignificant in FE and System GMM, suggesting the role of external scrutiny may be sensitive to model dynamics. Leverage exhibits a positive and significant relationship with REM in most models, but turns negative and nonsignificant under System GMM, pointing to endogeneity concerns. Interaction effects and country-specific regressions affirm that governance impacts differ across contexts. Policy reforms should prioritise gender-diverse leadership and tailored oversight mechanisms.

Keywords: real earnings management; CEO characteristics; gender diversity (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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