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Financial crisis and real earnings management in family firms: A comparison between China and the United States

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Listed:
  • Eng, Li Li
  • Fang, Hanqing
  • Tian, Xi
  • Yu, T. Robert
  • Zhang, Hongxian

Abstract

This paper compares real earnings management (REM) between Chinese family firms and U.S. family firms after the financial crisis of 2008. For the U.S. sample, there is greater REM in family firms than non-family firms, and in the post-financial crisis period than the pre-financial crisis period. For the Chinese sample, there is greater REM in family firms than non-family firms, but REM is lower in Chinese family firms relative to non-family firms in the post-financial crisis period than the pre-financial crisis period. These findings indicate that REM activities differ between U.S. and Chinese family firms in crisis and non-crisis periods.

Suggested Citation

  • Eng, Li Li & Fang, Hanqing & Tian, Xi & Yu, T. Robert & Zhang, Hongxian, 2019. "Financial crisis and real earnings management in family firms: A comparison between China and the United States," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 59(C), pages 184-201.
  • Handle: RePEc:eee:intfin:v:59:y:2019:i:c:p:184-201
    DOI: 10.1016/j.intfin.2018.12.008
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    Keywords

    2008 financial crisis; Family business; Real earnings management; China; United States;

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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