مقاله انگلیسی تاثیر مدیریت سود و توسعه مالی نهادی بر انتخاب ساختار سرمایه در بازارهای آمریکای لاتین
Abstract
Keywords
Introduction
Empirical Result
Conclusions and Discussion
References
ABSTRACT
We analyzed the effects of accruals-based earnings management practices and institutional-financial qualities of countries on the financing policy of Latin American companies. We used panel data on a sample of 983 companies between 1995 and 2017. Our results indicate that positive discretionary accruals reduce leverage and increase debt maturity. These findings suggest that accounting manipulation activities favor managerial entrenchment and seek to avoid external supervision and liquidity risk. The institutional and financial development of countries promotes leverage and long-term debt issuances. However, its effects do not mitigate the impact of accounting manipulation activities on this policy. The IFRS adoption is an effective means of control that attenuates the effects of earnings management on capital structure. These results are relevant for investors and policymakers due to their implications for firms’ corporate governance and financial policy design.
Introduction
Capital structure is a relevant topic in the field of corporate finance. Agency conflicts between insiders and outsiders, and the information asymmetry between them, positions accruals-based earnings management (EM) practices as a key factor in capital structure. This fact is more relevant for emerging markets such as Latin America. This market is characterized by firms issuing less corporate debt in relation to other emerging countries (Booth et al. 2001) and by low financial and institutional development (Muñoz et al. 2021b). Although these features encourage more aggressive EM practices compared to other similar markets (Leuz, Nanda, and Wysocki 2003), their impacts on firms’ capital structure have not yet been researched. In addition, empirical evidence has also established that factors such as profitability, sales and firm size are determinants of the capital structure (Ramli, Latan, and Solovida 2019). As these factors depend on the quality of the financial information disclosed by companies, we present another reason why EM would determine the financing structure.