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Does earnings management matter for firm leverage? An international analysis

journal contribution
posted on 2023-10-24, 23:53 authored by T L Dang, M Dang, P D Le, H N Nguyen, Q M N Nguyen, D Henry
This paper examines the relation between corporate information environment and capital structure decisions, and whether this association changes with cross-country institutional environments. Using earnings management as a measure of the corporate information environment, we find that firms with higher earnings management activities have greater firm leverage ratios. We further document that the effect of earnings management on leverage is more pronounced in countries with weaker institutional environments. Overall, our study adds to the strand of research on imperfect factor markets and verifies the influence of information asymmetry on debt financing choices in a cross-country setting.

History

Journal

Asia-Pacific journal of accounting and economics

Pagination

Jan-25

Location

Abingdon, Eng.

ISSN

1608-1625

eISSN

2164-2257

Language

eng

Notes

In press

Publication classification

C Journal article; C1 Refereed article in a scholarly journal

Copyright notice

2018, City University of Hong Kong and National Taiwan University

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