Managerial Ownership, Information Content of Earnings, and Discretionary Accruals in a Non-US Setting

22 Pages Posted: 26 Jan 2003  

Gorm Gabrielsen

Copenhagen Business School

Jeffrey Gramlich

Carson College of Business

Thomas Plenborg

Copenhagen Business School

Abstract

This study employs Danish data to examine the empirical relationship between the proportion of managerial ownership and two characteristics of accounting earnings: the information content of earnings and the magnitude of discretionary accruals. In previous research concerning American firms, Warfield et al. (1995) document a positive relationship between managerial ownership and the information content of earnings, and a negative relationship between managerial ownership and discretionary accruals. We question the generality of the Warfield et al. result, as the ownership structure found in most other countries, including Denmark, deviates from the US ownership configuration. In fact, Danish data indicate that the information content of earnings is inversely related to managerial ownership.

JEL Classification: M41, M47, G32, G12

Suggested Citation

Gabrielsen, Gorm and Gramlich, Jeffrey and Plenborg, Thomas, Managerial Ownership, Information Content of Earnings, and Discretionary Accruals in a Non-US Setting. Journal of Business Finance & Accounting, Vol. 29, pp. 967-988, 2002. Available at SSRN: https://ssrn.com/abstract=333916

Gorm Gabrielsen

Copenhagen Business School ( email )

Statistics Group
Solbjerg Plads 3
DK - 2000 Frederiksberg
Denmark
+45 38153512 (Phone)
+45 38153500 (Fax)

Jeffrey Gramlich

Carson College of Business ( email )

Wilson Rd.
College of Business
Pullman, WA 99164
United States

HOME PAGE: http://https://business.wsu.edu/research-faculty/institutes/hoops-institute/

Thomas Plenborg (Contact Author)

Copenhagen Business School ( email )

Department of Accounting & Auditing
Solbjerg Plads 3
DK - 2000 Frederiksberg
Denmark

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