The Spillover Effect of Peer CEO Turnover on Real Earnings Management

• 成果类型: Article
• 署名作者: Park, KoEun
• 署名单位: University of Massachusetts System; University of Massachusetts Boston
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2019-0526
• 发表日期: 2023
• 页码: 479-501
• 关键词: activities manipulation; equity incentives; firm performance; moral hazard; trade-off; RISK; identification; COMPETITION; IMPACT

摘要

A growing literature provides evidence that peer considerations play a central role in shaping a firm's behavior. This paper documents that the frequency of forced CEO turnovers by product market peer firms is negatively associated with a firm's real earnings management. I find that the disciplinary role of forced CEO turnover explains the observed relation. These effects are stronger when firms are suspected to engage in real earnings management to meet or just beat earnings benchmarks. I find some evidence that peers' forced CEO turnovers reveal a link between real earnings management and subsequent operating failure. Overall, my findings suggest that observing product market peers' forced CEO turnovers provides an informative signal to discipline a firm's real earnings management behavior.