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dc.contributor.authorChen, Yangyang
dc.contributor.authorRhee, S. Ghon
dc.contributor.authorVeeraraghavan, Madhu
dc.contributor.authorZolotoy, Leon
dc.date.accessioned2018-03-29T04:14:08Z
dc.date.available2018-03-29T04:14:08Z
dc.date.issued2015
dc.identifier.issn0378-4266
dc.identifier.doi10.1016/j.jbankfin.2015.07.007
dc.identifier.urihttp://hdl.handle.net/10072/172405
dc.description.abstractWe examine whether stock liquidity exacerbates or mitigates managerial short-termism. Utilizing earnings management as a proxy for managerial short-termism, we establish three major findings. First, firms with liquid stocks engage in less accrual-based and real earnings management. Second, the effect of stock liquidity on earnings management is amplified for firms with high levels of managerial pay-for-performance sensitivity. Third, the positive association between the intensity of earnings management and firm cost of capital is evident only for firms with low stock liquidity. Our findings are consistent with the threat of blockholder exit as the main governance channel through which stock liquidity discourages opportunistic earnings management and mitigates managerial short-termism.
dc.description.peerreviewedYes
dc.languageEnglish
dc.language.isoeng
dc.publisherElsevier
dc.relation.ispartofpagefrom44
dc.relation.ispartofpageto59
dc.relation.ispartofjournalJournal of Banking and Finance
dc.relation.ispartofvolume60
dc.subject.fieldofresearchBanking, Finance and Investment not elsewhere classified
dc.subject.fieldofresearchApplied Mathematics
dc.subject.fieldofresearchEconomic Theory
dc.subject.fieldofresearchBanking, Finance and Investment
dc.subject.fieldofresearchcode150299
dc.subject.fieldofresearchcode0102
dc.subject.fieldofresearchcode1401
dc.subject.fieldofresearchcode1502
dc.titleStock liquidity and managerial short-termism
dc.typeJournal article
dc.type.descriptionC1 - Articles
dc.type.codeC - Journal Articles
gro.hasfulltextNo Full Text
gro.griffith.authorVeeraraghavan, Madhu


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