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Industrial robot use and corporate real earnings management: Evidence from China

Author

Listed:
  • Teng, Huiyang
  • Li, Xiaoshuo
  • Liu, Yuyan

Abstract

Industrial robots (IRs) are becoming an increasingly important production technology in the global manufacturing industry. Using Chinese A-share listed manufacturing companies as a research sample, this study identifies that using IRs significantly restricts corporate real earnings management (REM). Specifically, IRs reduce information asymmetry, improve product market performance, and enhance the incentive effect of executive compensation, thereby weakening executives’ self-benefit motives and increasing the cost of implementing REM. These findings underscore the role of IRs in corporate governance, allowing for a better understanding of robots’ microeconomic consequences and guiding future corporate governance practices.

Suggested Citation

  • Teng, Huiyang & Li, Xiaoshuo & Liu, Yuyan, 2024. "Industrial robot use and corporate real earnings management: Evidence from China," Finance Research Letters, Elsevier, vol. 69(PB).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324011735
    DOI: 10.1016/j.frl.2024.106144
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    More about this item

    Keywords

    Industrial robot; Real earnings management; Information asymmetry; Product market performance; Executive compensation;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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