Earnings Management and Social Capital
Texas A&M International University
August 24, 2011
American Accounting Association Annual Meeting, Denver, Colorado
I examine whether the social capital (altruism and honoring obligations) from the location of a firm’s headquarter can affect its earnings management. I find that earnings management is negatively associated with social capital: both accruals management and real earnings management are lower for firms headquartered in high social capital counties. These results are robust to controlling for a wide range of firm characteristics and regional characteristics.
Number of Pages in PDF File: 72
Keywords: Earnings Management, Social Capital, Discretionary Accruals, Real Earnings Management
JEL Classification: M14, M41working papers series
Date posted: July 25, 2011 ; Last revised: July 30, 2012
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