The Impact of Board Internationalization on Earnings Management

Reggy Hooghiemstra, Niels Hermes (), Lars Oxelheim and Trond Randøy
Additional contact information
Reggy Hooghiemstra: Faculty of Economics and Business, Postal: Department of Accounting and Auditing
Trond Randøy: School of Law and Business, Postal: University of Agder, Kristiansand

No 1096, Working Paper Series from Research Institute of Industrial Economics

Abstract: Prior literature shows that choices regarding board composition are associated with earnings management. We add to this literature by examining the effects of the presence of a foreign board member on earnings management. Using a sample of 3,249 firm-year observations representing 586 non-financial listed Nordic firms during 2001–2008, we find that the presence of a non-Nordic, foreign director is associated with significantly higher levels of earnings management. Moreover, we provide preliminary evidence that differences in accounting knowledge drive this effect. Our results suggest that it may not necessarily be beneficial to appoint a foreign director to the board.

Keywords: Earnings management; Board composition; Internationalization; Foreign board member; Accounting knowledge (search for similar items in EconPapers)
JEL-codes: G34 M16 M41 M52 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2015-12-03
New Economics Papers: this item is included in nep-cfn, nep-cse and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.ifn.se/wfiles/wp/wp1096.pdf (application/pdf)

Related works:
Working Paper: The impact of board internationalization on earnings management (2015)
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:hhs:iuiwop:1096

Access Statistics for this paper

More papers in Working Paper Series from Research Institute of Industrial Economics Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Elisabeth Gustafsson ().