Munich Personal RePEc Archive

Earnings Management and Contest to the Control: An Analysis of European Family Firms

Jara-Bertin, Mauricio and López-Iturriaga, Félix J. (2008): Earnings Management and Contest to the Control: An Analysis of European Family Firms.

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Abstract

This paper analyzes the influence of large shareholders on earnings management in family-owned firms using a sample of firms from 11 European countries. We consider how the contest to the control of the largest shareholder and the existence of a controlling coalition in family-owned firms affect earnings management in these firms. We find that increased contestability of the control of the largest shareholder reduces earnings management in family-owned firms. Our results also show that in firms in which the largest shareholder is a family, a second or third family shareholder increases discretionary accruals.

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