Footnote:
In: Capital Market Review. Vol 18, No 1 & 2. pp. 1-21, 2010
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments April 14, 2010 erstellt
Description:
Using 180 manufacturing firms from 1998 to 2004, the paper proves that insiders with controlling interest more than 36.78% increase earnings management (discretionary accruals) by 10.6%. However, they are risk-adverse and avoid inefficient investment after the financial crisis. On the other hand, firms in high concentrated industries accelerate information asymmetry, but they do not engage in earnings management. Our findings show that investment in Malaysia is dominated by inefficient investment. Through earnings management which inflates stock prices, firms increase investment at the expense of external shareholders as stock returns diminish before external shareholders realize the actual value of firms' performance. A firm with negative stock returns is associated with a 37.6% increases in discretionary accruals, which in turn leads to an additional 3.6% inefficient investment