Industrial robot use and corporate real earnings management: Evidence from China

Huiyang Teng, Xiaoshuo Li and Yuyan Liu

Finance Research Letters, 2024, vol. 69, issue PB

Abstract: Industrial robots (IRs) are becoming an increasingly important production technology in the global manufacturing industry. Using Chinese A-share listed manufacturing companies as a research sample, this study identifies that using IRs significantly restricts corporate real earnings management (REM). Specifically, IRs reduce information asymmetry, improve product market performance, and enhance the incentive effect of executive compensation, thereby weakening executives’ self-benefit motives and increasing the cost of implementing REM. These findings underscore the role of IRs in corporate governance, allowing for a better understanding of robots’ microeconomic consequences and guiding future corporate governance practices.

Keywords: Industrial robot; Real earnings management; Information asymmetry; Product market performance; Executive compensation (search for similar items in EconPapers)
JEL-codes: G3 M41 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324011735

DOI: 10.1016/j.frl.2024.106144

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