Institutional Investors Heterogeneity And Earnings Management: The R&D Investment Strategy

Iskandar Rebai ()
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Iskandar Rebai: FSEG SFAX, Tunisia

International Journal of Business Research and Management (IJBRM), 2011, vol. 1, issue 3, 122-131

Abstract: This study examines the association between different institutional investors\' ownership and earnings management practice through R&D expenditures. It investigates this relationship for a sample of 123 US firms. We examine also the effect of institutional ownership on earnings management of firms having different information environment (S&P 500 versus non S&P 500). Results show that while investment funds exacerbate earnings management by encouraging managers to limit R & D expenditures, pension funds and banks follow passive behaviors. Moreover, the hypothesis of the relevance of the environment information in the explanation of the institutional investors’ behavior seems to be important in our case.

Keywords: Institutional Investors; Earnings management; R&D (search for similar items in EconPapers)
JEL-codes: M0 (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:aml:intbrm:v:1:y:2011:i:3:p:122-131

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