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

Author Info

  • Jara-Bertin, Mauricio
  • López-Iturriaga, Félix J.

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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File URL: http://mpra.ub.uni-muenchen.de/9660/1/MPRA_paper_9660.pdf
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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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Keywords: corporate control; discretionary accruals; earnings management; family firms;

Find related papers by JEL classification:

  • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
  • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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