Import Competition and Earnings Management

Erik Lie; Keyang (Daniel) Yang

doi:10.2139/ssrn.4458435

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Import Competition and Earnings Management

Working paper

Open access

Import Competition and Earnings Management

Erik Lie and Keyang (Daniel) Yang

SSRN

05/25/2023

DOI: 10.2139/ssrn.4458435

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https://doi.org/10.2139/ssrn.4458435View

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Abstract

We examine the effect of product market competition on firms' earnings management practices. Using exogenous variation in import competition, we find that heightened competition reduces both accrual-based and real earnings management. We also show that several measures of competition from past studies are flawed and produce misleading results. Our findings suggest that competition, akin to corporate governance, curbs managers' tendencies to manipulate reported performance

Product market competition

Earnings management

Import competition

Accrual-based earnings management

Real earnings management

Corporate governance

Details

Title: Subtitle: Import Competition and Earnings Management
Creators: Erik Lie - University of Iowa
Keyang (Daniel) Yang - Washington State University
Resource Type: Working paper
DOI: 10.2139/ssrn.4458435
Publisher: SSRN
Number of pages: 45 pages
Language: English
Date posted: 05/25/2023
Date updated: 10/09/2023
Academic Unit: Finance
Record Identifier: 9984476570702771

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