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The influence of earnings management and bank structure on bank performance

The influence of earnings management and bank structure on bank performance <jats:sec> <jats:title content-type="abstract-subheading">Purpose</jats:title> <jats:p>The purpose of this paper is to examine the influence of bank structure and earnings management on bank performance in international markets. Specifically, the authors empirically examine non-foreign banks in the following emerging countries: Brazil, China, India, Mexico, Nigeria, Russia, and South Africa.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Design/methodology/approach</jats:title> <jats:p>A review of loan loss portfolio and bank’s power structure is examined to formulate testable conjectures. The authors used data collected from Bankscope for the aforementioned countries. The data range is from 1997 to 2009.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Findings</jats:title> <jats:p>The results suggest that: first, bank market structure and earnings management have a significantly negative influence on bank performance. Second, the negative influence is more pronounced in banks with higher level of concentration and earnings management.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Practical implications</jats:title> <jats:p>The evidence suggest that banks with monopoly power have a greater incentive to establish lending relationships, and monopoly enhancing regulation in the financial sector at the time of the Civil War contributed to industrialization in the USA. The evidence in the emerging market suggest that monopoly power (bank structure) and propensity to manage earnings leads to lower bank performance. As such, helping bankers in understanding the effect of their bank structure in relation to their performance.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Originality/value</jats:title> <jats:p>To the author’s knowledge, this is the first study that explores the determinants of managed earnings and bank structure on bank performance in emerging markets.</jats:p> </jats:sec> http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Managerial Finance CrossRef

The influence of earnings management and bank structure on bank performance

Managerial Finance , Volume 43 (7): 761-773 – Jul 10, 2017

The influence of earnings management and bank structure on bank performance


Abstract

<jats:sec>
<jats:title content-type="abstract-subheading">Purpose</jats:title>
<jats:p>The purpose of this paper is to examine the influence of bank structure and earnings management on bank performance in international markets. Specifically, the authors empirically examine non-foreign banks in the following emerging countries: Brazil, China, India, Mexico, Nigeria, Russia, and South Africa.</jats:p>
</jats:sec>
<jats:sec>
<jats:title content-type="abstract-subheading">Design/methodology/approach</jats:title>
<jats:p>A review of loan loss portfolio and bank’s power structure is examined to formulate testable conjectures. The authors used data collected from Bankscope for the aforementioned countries. The data range is from 1997 to 2009.</jats:p>
</jats:sec>
<jats:sec>
<jats:title content-type="abstract-subheading">Findings</jats:title>
<jats:p>The results suggest that: first, bank market structure and earnings management have a significantly negative influence on bank performance. Second, the negative influence is more pronounced in banks with higher level of concentration and earnings management.</jats:p>
</jats:sec>
<jats:sec>
<jats:title content-type="abstract-subheading">Practical implications</jats:title>
<jats:p>The evidence suggest that banks with monopoly power have a greater incentive to establish lending relationships, and monopoly enhancing regulation in the financial sector at the time of the Civil War contributed to industrialization in the USA. The evidence in the emerging market suggest that monopoly power (bank structure) and propensity to manage earnings leads to lower bank performance. As such, helping bankers in understanding the effect of their bank structure in relation to their performance.</jats:p>
</jats:sec>
<jats:sec>
<jats:title content-type="abstract-subheading">Originality/value</jats:title>
<jats:p>To the author’s knowledge, this is the first study that explores the determinants of managed earnings and bank structure on bank performance in emerging markets.</jats:p>
</jats:sec>

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Publisher
CrossRef
ISSN
0307-4358
DOI
10.1108/mf-12-2015-0329
Publisher site
See Article on Publisher Site

Abstract

<jats:sec> <jats:title content-type="abstract-subheading">Purpose</jats:title> <jats:p>The purpose of this paper is to examine the influence of bank structure and earnings management on bank performance in international markets. Specifically, the authors empirically examine non-foreign banks in the following emerging countries: Brazil, China, India, Mexico, Nigeria, Russia, and South Africa.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Design/methodology/approach</jats:title> <jats:p>A review of loan loss portfolio and bank’s power structure is examined to formulate testable conjectures. The authors used data collected from Bankscope for the aforementioned countries. The data range is from 1997 to 2009.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Findings</jats:title> <jats:p>The results suggest that: first, bank market structure and earnings management have a significantly negative influence on bank performance. Second, the negative influence is more pronounced in banks with higher level of concentration and earnings management.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Practical implications</jats:title> <jats:p>The evidence suggest that banks with monopoly power have a greater incentive to establish lending relationships, and monopoly enhancing regulation in the financial sector at the time of the Civil War contributed to industrialization in the USA. The evidence in the emerging market suggest that monopoly power (bank structure) and propensity to manage earnings leads to lower bank performance. As such, helping bankers in understanding the effect of their bank structure in relation to their performance.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Originality/value</jats:title> <jats:p>To the author’s knowledge, this is the first study that explores the determinants of managed earnings and bank structure on bank performance in emerging markets.</jats:p> </jats:sec>

Journal

Managerial FinanceCrossRef

Published: Jul 10, 2017

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