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Earnings Management and Contest to the Control: An Analysis of European Family Firms

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Author Info
Jara-Bertin, Mauricio
López-Iturriaga, Félix J.

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Abstract

This paper analyzes the influence of large shareholders on earnings management in family-owned firms using a sample of firms from 11 European countries. We consider how the contest to the control of the largest shareholder and the existence of a controlling coalition in family-owned firms affect earnings management in these firms. We find that increased contestability of the control of the largest shareholder reduces earnings management in family-owned firms. Our results also show that in firms in which the largest shareholder is a family, a second or third family shareholder increases discretionary accruals.

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Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 9660.

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Date of creation: 11 Jul 2008
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Handle: RePEc:pra:mprapa:9660

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Related research
Keywords: corporate control; discretionary accruals; earnings management; family firms;

Find related papers by JEL classification:
M41 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Accounting
G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Capital and Ownership Structure

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