Political corruption and corporate earnings management
Using U.S. Department of Justice data on political corruption convictions, I examine how political corruption affects firms’ earnings management. I find that companies headquartered in more corrupt states manipulate earnings downwards. The findings are robust to six alternative corruption measures,...
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| Other Authors: | |
| Format: | Thesis |
| Language: | English |
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2017
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| Online Access: | http://hdl.handle.net/10356/72893 |
| _version_ | 1811682020198187008 |
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| author | Zhang, Jin |
| author2 | Zhang Huai |
| author_facet | Zhang Huai Zhang, Jin |
| author_sort | Zhang, Jin |
| collection | NTU |
| description | Using U.S. Department of Justice data on political corruption convictions, I examine how political corruption affects firms’ earnings management. I find that companies headquartered in more corrupt states manipulate earnings downwards. The findings are robust to six alternative corruption measures, the restatement analysis, the accounting policy analysis, the instrumental variable approach, the difference-in-differences analysis, and an event study. In addition, I find that the effect of corruption on earnings management is more pronounced for firms whose operations concentrate in their headquarter states and for firms without political connections, but is not significant for firms on the edge of missing earnings benchmarks or firms facing tight debt covenants. In sum, my findings suggest that firms respond to corruption by managing earnings downwards. |
| first_indexed | 2024-10-01T03:50:12Z |
| format | Thesis |
| id | ntu-10356/72893 |
| institution | Nanyang Technological University |
| language | English |
| last_indexed | 2024-10-01T03:50:12Z |
| publishDate | 2017 |
| record_format | dspace |
| spelling | ntu-10356/728932024-01-12T10:13:02Z Political corruption and corporate earnings management Zhang, Jin Zhang Huai Nanyang Business School Centre for Accounting and Auditing Research DRNTU::Business::Management::Bureaucracy Using U.S. Department of Justice data on political corruption convictions, I examine how political corruption affects firms’ earnings management. I find that companies headquartered in more corrupt states manipulate earnings downwards. The findings are robust to six alternative corruption measures, the restatement analysis, the accounting policy analysis, the instrumental variable approach, the difference-in-differences analysis, and an event study. In addition, I find that the effect of corruption on earnings management is more pronounced for firms whose operations concentrate in their headquarter states and for firms without political connections, but is not significant for firms on the edge of missing earnings benchmarks or firms facing tight debt covenants. In sum, my findings suggest that firms respond to corruption by managing earnings downwards. Doctor of Philosophy (NBS) 2017-12-11T07:47:47Z 2017-12-11T07:47:47Z 2017 Thesis Zhang, J. (2017). Political corruption and corporate earnings management. Doctoral thesis, Nanyang Technological University, Singapore. http://hdl.handle.net/10356/72893 10.32657/10356/72893 en 76 p. application/pdf |
| spellingShingle | DRNTU::Business::Management::Bureaucracy Zhang, Jin Political corruption and corporate earnings management |
| title | Political corruption and corporate earnings management |
| title_full | Political corruption and corporate earnings management |
| title_fullStr | Political corruption and corporate earnings management |
| title_full_unstemmed | Political corruption and corporate earnings management |
| title_short | Political corruption and corporate earnings management |
| title_sort | political corruption and corporate earnings management |
| topic | DRNTU::Business::Management::Bureaucracy |
| url | http://hdl.handle.net/10356/72893 |
| work_keys_str_mv | AT zhangjin politicalcorruptionandcorporateearningsmanagement |