IDEAS home Printed from https://ideas.repec.org/a/taf/raflxx/v3y2007i5p287-293.html
   My bibliography  Save this article

ESOPs and earnings management: an empirical note

Author

Listed:
  • Pornsit Jiraporn

Abstract

This study seeks to ascertain the impact of employee stock ownership plans (ESOPs) on earnings management. The empirical evidence shows that firms with larger ESOP ownership exhibit a lower degree of earnings management. I suggest that this is the case because ESOPs motivate employees to monitor management, hence, reducing managerial opportunism in the form of earnings management. Besides, ESOPs may act as a takeover defence and help managers take the long-term view of the firm, thus, lessening the motivation for short-term transient earnings distortion. Finally, there is evidence that ESOP ownership alleviates earnings management only in firms where outside blockholders are present. 1 This empirical note was written when the author was on the finance faculty at Texas A & M International University (TAMIU) in Laredo, Texas.

Suggested Citation

  • Pornsit Jiraporn, 2007. "ESOPs and earnings management: an empirical note," Applied Financial Economics Letters, Taylor & Francis Journals, vol. 3(5), pages 287-293.
    • Handle: RePEc:taf:raflxx:v:3:y:2007:i:5:p:287-293
    DOI: 10.1080/17446540601118335
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/17446540601118335
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/17446540601118335?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:raflxx:v:3:y:2007:i:5:p:287-293. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rafl20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.