Information asymmetry, mutual funds and earnings management: Evidence from China

• 作者: Dongmin Kong Li Wang Yunhao Dai
• 来源期刊: 中国会计学刊：英文版
• 学科: 经济
• 关键词: INFORMATION asymmetry Mutual FUNDS EARNINGS MANAGE
• 年，卷（期）: 2013,（3）
• 页码范围: 187-209
• 页数: 23页
• 分类号: F832.51

摘要

This paper investigates how information asymmetry and mutual fund ownership affect listed companies’ earnings management. We show that(1) reducing information asymmetry improves firms’ earnings management behavior;(2)relative to short-term mutual funds, long-term mutual funds promote earnings quality by adopting a monitoring role; and(3) by dividing firms into high/low information asymmetry groups, we find that the information environment significantly increases the effect of long-term mutual funds on firms’ earnings management. In this paper, we provide new evidence for the role that institutional investors play in a typical emerging capital market. Our results have clear policy implications: to increase earnings quality, it is essential to improve information transparency and develop long-term institutional investors.