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Managerial entrenchment and earnings management

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dc.affiliation.dptoUC3M. Departamento de Economía de la Empresaes
dc.contributor.authorDi Meo, Fabrizio
dc.contributor.authorGarcía-Lara, Juan M.
dc.contributor.authorSurroca, Jordi
dc.contributor.funderMinisterio de Economía y Competitividad (España)es
dc.contributor.funderUniversidad Carlos III de Madrides
dc.contributor.funderComunidad de Madrides
dc.date.accessioned2022-06-29T17:30:12Z
dc.date.available2022-06-29T17:30:12Z
dc.date.issued2017-10-01
dc.description.abstractAgency theorists have long contended that managerial entrenchment is detrimental for shareholders, because it protects managers from the discipline of corporate governance. However, as a competing hypothesis, we argue that entrenchment can also provide benefits for the firm’s owners: it leads managers to be less myopic in managing earnings to meet short-term financial reporting goals. Our findings are consistent with this prediction as they suggest that, when there are incentives to manipulate firms’ performance, entrenched managers are less prone to engage in earnings management activities that hurt shareholders. Specifically, we focus on firms that just meet or marginally beat earnings benchmarks and document a negative association between managerial entrenchment and both the opportunistic use of accruals and the manipulation of real activities. We also show that earnings management is less detrimental to firm value if the manager is entrenched. Finally, we find that these effects of entrenchment on earnings management are only present for firms domiciled in Delaware.en
dc.description.sponsorshipWe acknowledge financial contribution from the Spanish Ministry of Science and Innovation, grants ECO2016-77579 and ECO2013-48328, Ministry of Economy, Industry and Competitiveness, grant ECO2012-34734, and from the CAM-UC3M, grant CCG10-UC3M/HUM-4760 and H2015/HUM-3417, INNCOMCON-CMen
dc.identifier.bibliographicCitationDi Meo, F., García Lara, J. M., & Surroca, J. A. (2017). Managerial entrenchment and earnings management. Journal of Accounting and Public Policy, 36 (5), pp. 399-414.en
dc.identifier.doihttps://doi.org/10.1016/j.jaccpubpol.2017.07.003
dc.identifier.issn0278-4254
dc.identifier.publicationfirstpage399es
dc.identifier.publicationissue5es
dc.identifier.publicationlastpage414es
dc.identifier.publicationtitleJOURNAL OF ACCOUNTING AND PUBLIC POLICYen
dc.identifier.publicationvolume36es
dc.identifier.urihttps://hdl.handle.net/10016/35344
dc.identifier.uxxiAR/0000020759
dc.language.isoenges
dc.publisherElsevieres
dc.relation.projectIDComunidad de Madrid. CCG10-UC3M/HUM-4760es
dc.relation.projectIDGobierno de España. ECO2012-34734es
dc.relation.projectIDComunidad de Madrid. S2015/HUM-3417es
dc.relation.projectIDGobierno de España. ECO2013-48328-C3-2-Pes
dc.relation.projectIDGobierno de España. ECO2016-77579-C3-2-Pes
dc.rights© Elsevier, 2017en
dc.rightsAtribución-NoComercial-SinDerivadas 3.0 España*
dc.rights.accessRightsopen accesses
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/es/*
dc.subject.ecienciaEconomíaes
dc.subject.ecienciaEmpresaes
dc.subject.jelG3
dc.subject.jelM4
dc.subject.otherManagerial entrenchmenten
dc.subject.otherEarnings managementen
dc.titleManagerial entrenchment and earnings managementen
dc.typeresearch article*
dc.type.hasVersionAM*
dspace.entity.typePublication
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