Government subsidies and income smoothing

• 成果类型: Article
• 署名作者: Pappas, Kostas; Walker, Martin; Xu, Alice Liang; Zeng, Cheng (Colin)
• 署名单位: University of Liverpool; University of Manchester; Alliance Manchester Business School; Hong Kong Polytechnic University
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12947
• 发表日期: 2024
• 页码: 1477-1512
• 关键词: research-and-development; political cost incentives; earnings management; discretionary accruals; electoral systems; investors; disclosure; benefits; QUALITY; IMPACT

摘要

This study examines the relationship between government subsidies and income smoothing using a sample of US-listed firms. We find that subsidized firms smooth their earnings more aggressively than their unsubsidized peers. This finding is consistent with the reasoning that subsidized firms bear higher political costs and have more incentives to smooth earnings to avoid public attention. In addition, smoothing by subsidized firms is more pronounced when the subsidies are granted through non-tax-related channels than through tax-based channels, and the positive association between government subsidies and income smoothing is stronger for firms under higher public scrutiny and with less transparent information environments. Further analysis shows that smoothing by subsidized firms serves mainly to obfuscate earnings and that subsidized firms that smooth earnings tend to continue receiving subsidies in the future. Overall, our results help explain the role of government subsidies in shaping firms' accounting and disclosure choices. Subventions gouvernementales et lissage des r & eacute;sultatsCette & eacute;tude examine la relation entre les subventions gouvernementales et le lissage des r & eacute;sultats & agrave; partir d'un & eacute;chantillon d'entreprises cot & eacute;es en bourse aux & Eacute;tats-Unis. Le travail d'analyse d & eacute;montre que les entreprises subventionn & eacute;es lissent leurs r & eacute;sultats de mani & egrave;re plus intensive que leurs homologues non subventionn & eacute;es. Ce r & eacute;sultat appuie l'id & eacute;e que les entreprises subventionn & eacute;es assument des cons & eacute;quences politiques plus lourdes et sont davantage motiv & eacute;es & agrave; lisser leurs r & eacute;sultats pour d & eacute;vier l'attention du public. En outre, le lissage est plus prononc & eacute; chez les entreprises subventionn & eacute;es lorsque les subventions sont accord & eacute;es dans un cadre non fiscal, comparativement & agrave; un cadre fiscal. Par ailleurs, la relation positive entre les subventions gouvernementales et le lissage des r & eacute;sultats est plus forte pour les entreprises soumises & agrave; un contr & ocirc;le public accru et dont l'environnement informationnel favorise moins la transparence. Une analyse plus approfondie r & eacute;v & egrave;le que le lissage pratiqu & eacute; par les entreprises subventionn & eacute;es vise principalement & agrave; maquiller les r & eacute;sultats et que ces entreprises ont tendance & agrave; recevoir de nouvelles subventions dans le futur. En r & eacute;sum & eacute;, cette & eacute;tude contribue & agrave; expliquer le r & ocirc;le des subventions gouvernementales dans les d & eacute;cisions des entreprises en mati & egrave;re de comptabilit & eacute; et de communication d'informations.