Decision-making Rights Allocation, Earnings Management and Investment Efficiency
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| Title | Decision-making Rights Allocation, Earnings Management and Investment Efficiency
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| Author | Liu Huilong, Wang Chengfang and Wu Liansheng |
| Organization | Business School, University of International Business and Economics; School of Accounting, Zhejiang University of Finance and Economics; Guanghua School of Management, Peking University |
| Email | lhlgsmer@126.com；wangchengfang@ruc.edu.cn；wangchengfang@ruc.edu.cn； |
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| Abstract | This paper examines how interactive effect of CEO duality and earnings management impacts investment efficiency. It shows that earnings management does not significantly affect investment efficiency in CEO separation firms, and that CEO duality also does not significantly affect investment efficiency in lower level earnings management firms. Earnings management causes more inefficient investment to CEO duality firms than CEO separation firms. CEO duality reduces more investment efficiency to high degree earnings management firms than low level earnings management firms. Earnings management is positively associated with inefficient investment in CEO duality firms, and CEO duality is positively associated with inefficient investment in high degree earnings management firms. This paper extends the extant literature of relationship between earnings quality and investment efficiency, and deepens the research about the economic consequences of decision-making rights allocation. |
| Serial Number | WP636 |
| Time | 2014-08-05 |
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