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Institutional Investors Heterogeneity And Earnings Management: The R&D Investment Strategy

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  • Iskandar REBAI

    (FSEG SFAX, Tunisia)

Abstract

This study examines the association between different institutional investors\' ownership and earnings management practice through R&D expenditures. It investigates this relationship for a sample of 123 US firms. We examine also the effect of institutional ownership on earnings management of firms having different information environment (S&P 500 versus non S&P 500). Results show that while investment funds exacerbate earnings management by encouraging managers to limit R & D expenditures, pension funds and banks follow passive behaviors. Moreover, the hypothesis of the relevance of the environment information in the explanation of the institutional investors’ behavior seems to be important in our case.

Suggested Citation

  • Iskandar REBAI, 2011. "Institutional Investors Heterogeneity And Earnings Management: The R&D Investment Strategy," International Journal of Business Research and Management (IJBRM), Computer Science Journals (CSC Journals), vol. 1(3), pages 122-131, February.
    • Handle: RePEc:aml:intbrm:v:1:y:2011:i:3:p:122-131
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    References listed on IDEAS

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    More about this item

    Keywords

    Institutional Investors; Earnings management; R&D;
    All these keywords.

    JEL classification:

    • M0 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General

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