Corporate governance, competition and earnings management: evidence from Asian emerging economies
Journal of Financial Reporting and Accounting
ISSN: 1985-2517
Article publication date: 5 October 2022
Abstract
Purpose
This paper aims to explore the nexus between corporate governance, competition and earnings management (EM) in Asian emerging economies.
Design/methodology/approach
The authors used a sample of 116 banks from 10 Asian emerging economies from 2010 to 2021. To measure corporate governance, the board size, chief executive officer duality and ownership concentration are used. Competition is captured with Herfindahl-Hirschman Index (HHI) and Lerner index (LI). Although earning management is measured through discretionary accruals. The authors use fixed effect regression for hypothesis testing. However, dynamic panel system generalised method of moments estimation is used to confirm the robustness of the results.
Findings
The authors find that corporate governance and competition are significantly related to earning management practices of banks in emerging Asian economies. The authors report similar outcomes with both estimation methods verifying the reliability of results.
Originality/value
The findings of the study have implications for corporate regulatory authorities, management and investors in the Asian emerging economies. Banks in the Asian emerging economies need to pay more attention to factors such as governance and competition to avoid EM.
Keywords
Citation
Shira, R.K. (2022), "Corporate governance, competition and earnings management: evidence from Asian emerging economies", Journal of Financial Reporting and Accounting, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JFRA-07-2022-0270
Publisher
:Emerald Publishing Limited
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