The Effect of Earnings Management on Debt Maturity: An International Study

Yao Maurice (), Yves Mard () and Éric Séverin ()
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Yves Mard: CleRMa - Clermont Recherche Management - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA [2017-2020] - Université Clermont Auvergne [2017-2020]

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Abstract: This paper examines the effect of earnings management on debt maturity and how this relation is influenced by institutional environment. The sample is from 17 European countries of STOXX Europe 600 Index over the 2006-2014 period. We find that firms with high earnings management activities, both discretionary accruals and real earnings management, are associated with less long-term debt. More importantly, we observe that the negative link between earnings management and long-term debt holds only in countries with weak creditor rights. This suggests that high creditor protection tends to compensate for the weakness of borrowers' financial reporting quality.

Keywords: debt maturity; earnings management; creditor rights; gestion des résultats; protection des créanciers; maturité de la dette (search for similar items in EconPapers)
Date: 2020-05-01
Note: View the original document on HAL open archive server: https://hal.science/hal-03029366v1
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Citations: View citations in EconPapers (2)

Published in Comptabilité Contrôle Audit / Accounting Auditing Control, 2020, 26 (2), pp.125. ⟨10.3917/cca.262.0125⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03029366

DOI: 10.3917/cca.262.0125

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