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Internationalization and earnings management: Evidence from China

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  • Han, Wei
  • Wu, Di

Abstract

Firm internationalization is an important strategy for enhancing competitive advantage. This study investigates the effects of internationalization on firm earnings management behavior by detecting multinational corporations’ earnings manipulation. No substitute effect of accrual earnings management and real earnings management is observed in the multinational operating enterprises’ earnings management activities. We find that internationalization increases firms’ motivation to manage accrual earnings. The higher the degree of multinational operation, the more inclined the firm is to manipulate accrual income to achieve its goals.

Suggested Citation

  • Han, Wei & Wu, Di, 2023. "Internationalization and earnings management: Evidence from China," Finance Research Letters, Elsevier, vol. 53(C).
    • Handle: RePEc:eee:finlet:v:53:y:2023:i:c:s1544612322007656
    DOI: 10.1016/j.frl.2022.103589
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    References listed on IDEAS

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    1. Christof Beuselinck & Stefano Cascino & Marc Deloof & Ann Vanstraelen, 2019. "Earnings management within multinational corporations," Post-Print hal-01914626, HAL.
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