IDEAS home Printed from https://ideas.repec.org/a/sae/iimkoz/v14y2025i1p75-87.html
   My bibliography  Save this article

Insider Ownership and Real Earnings Management in Indian Companies

Author

Listed:
  • Srikanth Potharla
  • Rachappa Shette

Abstract

The present study aims to examine, and to test the monitoring effect of institutional investment on, the relationship between insider ownership and real earnings management in Indian companies. The study examines the non-linear association between insider ownership and real earnings management using a sample of listed non-financial companies in the Indian market from 2011 to 2018. The study used pooled data OLS regression and Quantile regression. The findings reveal significant non-linear U-shaped relationship between insider ownership and real earnings management and that the large-size institutional investment makes such non-linear relationship insignificant. Contribution of the present study to the literature is two-fold. First, it proves the differential impact of the size of insider ownership on real earnings management. It indicates that firms having large-size insider ownership have greater scope for real earnings management, underscoring the need for the more scrutiny of reported earnings by the outsider shareholders. Second, it proves significant positive effect of the size of institutional investment in constraining the entrenchment by the insider owners. It signals that firms with large-size institutional investment have better quality of financial reporting and also contribute to efficient price discovery in the capital markets.

Suggested Citation

  • Srikanth Potharla & Rachappa Shette, 2025. "Insider Ownership and Real Earnings Management in Indian Companies," IIM Kozhikode Society & Management Review, , vol. 14(1), pages 75-87, January.
    • Handle: RePEc:sae:iimkoz:v:14:y:2025:i:1:p:75-87
    DOI: 10.1177/22779752221125262
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/22779752221125262
    Download Restriction: no
    File URL: https://libkey.io/10.1177/22779752221125262?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:iimkoz:v:14:y:2025:i:1:p:75-87. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.