Economics at your fingertips  

Debt structure and earnings management: A non-linear analysis from an emerging economy

Thanh Su, Canh Nguyen () and Nguyen Tran Thai Ha

Finance Research Letters, 2020, vol. 35, issue C

Abstract: The study investigates the relationship between debt ratio and earnings management based on the Panel Smooth Transition Regression (PSTR) model for the panel data of 432 non-financial Vietnamese listed firms over the period of 2006–2017. The estimated results properly show non-linear effects of debt ratio on earnings management in two regimes: (i) positive effect in low debt regime and (ii) negative effect in high debt regime. These results imply that debt ratio changes occur in earnings management before and after firms reach the optimal debt threshold point. Our research findings are robust to different debt ratio measures and methodologies.

Keywords: Debt ratio; Earnings management; Non-linear relationship (search for similar items in EconPapers)
JEL-codes: G32 M41 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

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:

DOI: 10.1016/

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2022-01-26
Handle: RePEc:eee:finlet:v:35:y:2020:i:c:s1544612319305240