Don’t Touch My Cheese: Short Selling Pressure, Executive Compensation Justification, and Real Activity Earnings Management

Fei Liu, Jianhua Du and Chao Bian

Emerging Markets Finance and Trade, 2019, vol. 55, issue 9, 1969-1990

Abstract: This article aims at investigating the effects of short selling on a firm’s executive compensation and earnings management. We use a panel data set of Chinese public firms from 2007 to 2014 to test our hypotheses. We find that the level of excess compensation in short-selling firms is greater than that in non-short-selling firms. Our further analysis shows that the executives of the short-selling firms will justify their excess compensation by improving the pay-performance sensitivity, which is accomplished through the real earnings management. Finally, we find that there is more prominent decrease/increase in accrual/real earnings management in short-selling firms.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1080/1540496X.2018.1501675 (text/html)
Access to full text is restricted to subscribers.

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: https://EconPapers.repec.org/RePEc:mes:emfitr:v:55:y:2019:i:9:p:1969-1990

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MREE20

DOI: 10.1080/1540496X.2018.1501675

Access Statistics for this article

More articles in Emerging Markets Finance and Trade from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().