Ownership Concentration, IFRS Adoption and Earnings Quality: Evidence from an Emerging Market

50 Pages Posted: 23 Jan 2014

See all articles by Mine H. Aksu

Mine H. Aksu

Sabanci University

Yaz Gulnur Muradoglu

Queen Mary University of London; City University London - Sir John Cass Business School

Ayse Tansel Cetin

Sabanci University

Date Written: August 30, 2013

Abstract

We investigate the impact of corporate governance characteristics, and IFRS on earnings quality in Borsa Istanbul (BIST). Our contribution stems from the fact that we study moderating effects of mandatory IFRS adoption on the relationship between ownership concentration and earnings quality in a setting characterized by low minority ownership rights protection and high ownership concentration in the form of family-owned pyramids, in a code law country with lax rules and weak enforcement. We use a unique data set that is hand collected. We find strong first time evidence for low persistence of earnings and high earnings management and that ownership concentration impedes earnings quality while foreign ownership enhances it. Mandatory IFRS adoption has had a strong positive effect on earnings persistence and a weaker effect on earnings management. However, the impact of IFRS in reducing the negative impact of only family type ownership concentration is noteworthy.

Keywords: Corporate governance, IFRS, earnings persistence, earnings management, ownership concentration, emerging markets

JEL Classification: G34, G38, M41, M48

Suggested Citation

Aksu, Mine H. and Muradoglu, Yaz Gulnur and Tansel Cetin, Ayse, Ownership Concentration, IFRS Adoption and Earnings Quality: Evidence from an Emerging Market (August 30, 2013). Available at SSRN: https://ssrn.com/abstract=2382930 or http://dx.doi.org/10.2139/ssrn.2382930

Mine H. Aksu (Contact Author)

Sabanci University ( email )

School of Management
Istanbul, Orhanli, Tuzla 34956
Turkey
+90 216 483 9678 (Phone)
+90 216 483 9699 (Fax)

HOME PAGE: http://people.sabanciuniv.edu/~maksu

Yaz Gulnur Muradoglu

Queen Mary University of London ( email )

Francis Bancroft Building
Mile End Road
London, E1 4NS
United Kingdom

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom
+44 20 7040 0124 (Phone)
+44 20 7040 8853 (Fax)

Ayse Tansel Cetin

Sabanci University ( email )

Orta Mahalle Üniversite Caddesi 27
Istanbul, Orhanli, 34956 Tuzla 34956
Turkey

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