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Impact of female directors on the board and foreign institutional investors on earning manipulation of Chinese listed companies

Impact of female directors on the board and foreign institutional investors on earning... The purpose of this paper is to check the impact of female directors on the board and foreign institutional investors on earnings manipulation.Design/methodology/approachThe data sample includes Chinese listed companies on the Shenzhen and Shanghai stock exchanges. The data are collected from China Stock Market and Accounting Research database covering the period from 2010 to 2017. The authors use a dynamic generalized method of moments in the study.FindingsThe findings show that the presence of female director on the board has a significant negative impact on both discretionary accruals and real earning management. However, the authors obtain different results for foreign institutional investor investors. This may be the result of myopia as the foreign institutional stockholders in Chinese companies are looking for quick profit encouraging management to manipulate earnings. the findings survive several robustness tests.Originality/valueThe authors expect the research results provide ample evidence about how female directors affects earnings manipulation, and also hope the research helps to understand how, in China, institutional ownership affects earnings manipulation. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Asia-Pacific Journal of Business Administration Emerald Publishing

Impact of female directors on the board and foreign institutional investors on earning manipulation of Chinese listed companies

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1757-4323
DOI
10.1108/apjba-10-2018-0189
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to check the impact of female directors on the board and foreign institutional investors on earnings manipulation.Design/methodology/approachThe data sample includes Chinese listed companies on the Shenzhen and Shanghai stock exchanges. The data are collected from China Stock Market and Accounting Research database covering the period from 2010 to 2017. The authors use a dynamic generalized method of moments in the study.FindingsThe findings show that the presence of female director on the board has a significant negative impact on both discretionary accruals and real earning management. However, the authors obtain different results for foreign institutional investor investors. This may be the result of myopia as the foreign institutional stockholders in Chinese companies are looking for quick profit encouraging management to manipulate earnings. the findings survive several robustness tests.Originality/valueThe authors expect the research results provide ample evidence about how female directors affects earnings manipulation, and also hope the research helps to understand how, in China, institutional ownership affects earnings manipulation.

Journal

Asia-Pacific Journal of Business AdministrationEmerald Publishing

Published: Nov 4, 2019

Keywords: Corporate governance; Female directors; Accrual earnings manipulation; Foreign institutional investors; Real earning management

References