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Institutional investors and real earnings management: A meta-analysis

Author

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  • Kabaciński Bartosz

    (Poznań University of Economics and Business, Institute of Accounting and Financial Management, al. Niepodległości 10, 61-875 Poznań, Poland)

  • Mizerka Jacek

    (Poznań University of Economics and Business, Institute of Accounting and Financial Management, al. Niepodległości 10, 61-875 Poznań, Poland)

  • Stróżyńska-Szajek Agnieszka

    (Poznań University of Economics and Business, Institute of Accounting and Finance Management, al. Niepodległości 10, 61-875 Poznań, Poland)

Abstract

The aim of the article is to examine the influence of institutional investor ownership on real earnings’ management (REM) practices through a meta-regression analysis (MRA) based on a sample of 225 estimations from 19 articles. Some of the available research suggests a mitigating role for institutional investors who can serve as external monitors and thus reduce earnings’ management activities which could have a negative impact on the company’s value. The results obtained from the basic model confirmed neither the hypothesis about the influence of institutional ownership on REM, nor the hypothesis about the existence of a significant publication bias. Using an augmented MRA model conclusions in different areas associated with structural and methodological heterogeneity were drawn. Differences in the impact of institutional ownership on real earnings’ management in different regions of the world, a dependence of the results on different data characteristics and differences in the results depending on whether the article was published in a top journal or not were found.

Suggested Citation

  • Kabaciński Bartosz & Mizerka Jacek & Stróżyńska-Szajek Agnieszka, 2022. "Institutional investors and real earnings management: A meta-analysis," Economics and Business Review, Sciendo, vol. 8(2), pages 50-79, July.
    • Handle: RePEc:vrs:ecobur:v:8:y:2022:i:2:p:50-79:n:1
    DOI: 10.18559/ebr.2022.2.4
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    References listed on IDEAS

    as
    1. Lemma, Tesfaye T. & Negash, Minga & Mlilo, Mthokozisi & Lulseged, Ayalew, 2018. "Institutional ownership, product market competition, and earnings management: Some evidence from international data," Journal of Business Research, Elsevier, vol. 90(C), pages 151-163.
    2. Katherine A. Gunny, 2010. "The Relation Between Earnings Management Using Real Activities Manipulation and Future Performance: Evidence from Meeting Earnings Benchmarks," Contemporary Accounting Research, John Wiley & Sons, vol. 27(3), pages 855-888, September.
    3. Li, Chihua & Tseng, Yijie & Chen, Tsung-Kang, 2016. "Top management team expertise and corporate real earnings management activities," Advances in accounting, Elsevier, vol. 34(C), pages 117-132.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    real earnings management; institutional ownership; meta-analysis; corporate finance;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods

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