Employee share ownership and the nature of earnings management

Joseph Abdelnour, Nicolas Aubert () and Domenico Campa
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Joseph Abdelnour: ESSCA Research Lab - ESSCA - ESSCA – École supérieure des sciences commerciales d'Angers = ESSCA Business School
Domenico Campa: IUM - International University of Monaco

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Abstract: Using a sample of French listed companies, this article investigates whether employee share ownership (ESO) plays a role on the nature of earnings management (EM). Moreover, we aim to explore the documented ambiguous effects of EM and ESO on information asymmetry. Using an agency theory approach, we first observe that, in general, French companies use EM opportunistically rather than for informative purposes. Then, we find that ESO mitigates EM by 1) reducing the overall EM level and 2) making EM less opportunistic and more beneficial for the company.

Keywords: Employee share ownership; earnings management discretionary accruals; agency costs; managerial entrenchment (search for similar items in EconPapers)
Date: 2024-09-23
Note: View the original document on HAL open archive server: https://hal.science/hal-04706859v1
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Published in International Review of Applied Economics, 2024, pp.1-23. ⟨10.1080/02692171.2024.2406345⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04706859

DOI: 10.1080/02692171.2024.2406345

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