Earnings Management and Performance in Family-Controlled: Evidence from an emerging economy

Date

2014-11-27

Type:

Working Paper

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Abstract

This study introduces an earnings management dimension to compute premanipulated accounting performance to determine whether family-controlled firms have higher performance relative to non-family-controlled firms. Using a premanipulated return on assets measure for Chilean firms dataset, we find that the premanipulated performance of family controlled firms is superior to that of non-family-controlled firms. We also show that the presence of institutional investors in the firm’s ownership structure has a positive influence on performance of family companies. The results suggest that earnings management behavior is not sufficient to explain the higher performance of family-controlled firms that has been reported in the literature

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Citation

Keywords

Family-controlled firms, Earnings management, Accounting performance

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