Earnings Management Around M&A Transactions: The Emerging Market Evidence

• Main Authors: SHIH,LIANG-YIN, 施亮吟
• Other Authors: Yen,Tze-Uu
• Format: Others
• Language: en_US
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/59067793758203257681

碩士 === 國立中正大學 === 財務金融系研究所 === 104 === The active mergers and acquisitions activities in emerging market become a central issue but empirical studies focusing on this market, compared with developed country, are relatively scarce. This thesis provides the evidence on the acquirers’ two earnings management channel (accrual-based earnings management and real-based earnings management) around mergers and acquisitions by using 6,870 deals from 24 emerging countries during year 2009 to year 2013. Moreover, we explore the relationship between this two earnings management measures. The results confirm that 1) acquiring firms tend to do earnings management before the announcement of transaction. And acquiring firm would choose do downward accrual-based earnings management and upward real-based earnings management; 2) firm size and leverage ratio have positive influence on the degree of accrual-based earnings management, and transaction amount decrease the level of accrual-based earnings management; 3) country legal systems have significantly negative impacts on accrual-based earnings management. This result supports the hypotheses that better country-specific legal systems constrain the accrual-based earnings management channel; 4) The effects of firm-specific attributes, deal-specific term and country legal system on the degree of real-based earnings management are not significant. Furthermore, results regarding to the relationship between this two earnings management channels are: 1) when real-based earnings management is constrained, the acquirers tend to do downward accrual-based earnings management; 2) after controlling legal factors, the acquirers tend to do upward accrual-based earnings management; 3) when accrual-based earnings management is constrained, the acquirers tend to do upward real-based earnings management; 4) after controlling legal factors, only the acquirer in service industry tend to do upward real-based earnings management.