Table 6 Earnings management and...

Table 6

Earnings management and institutional investor ownership, post-SOX—between-within panel regression

	Model 9	Model 10	Model 11	Model 12
	Earnings surprise	Abnormal discretionary accruals	Abnormal production costs	Abnormal decreases in discretionary expenses
Between-firm effects
$IO$	0.506***	0.004	−0.060***	−0.110**
$IO$	(4.48)	(0.21)	(−4.27)	(−2.29)
$Firm size$	−0.048	0.011	0.034***	0.025
$Firm size$	(−0.75)	(0.67)	(6.17)	(1.09)
$RO A$	0.510***	−0.034	−0.026***	0.116
$RO A$	(3.62)	(−1.43)	(−4.56)	(1.39)
$Mar k et to book$	−0.001	0.001	−0.001**	−0.004**
$Mar k et to book$	(−0.28)	(1.31)	(−2.12)	(−2.08)
$Leverage$	−0.236**	−0.039*	0.053***	−0.082
$Leverage$	(−2.05)	(−1.66)	(3.55)	(−1.31)
$Big auditor$	−0.175**	0.054**	−0.080***	−0.171***
$Big auditor$	(−2.14)	(2.44)	(−6.75)	(−3.26)
Within-firm effects
$IO$	0.117	0.033	0.002	0.030
$IO$	(0.75)	(1.17)	(0.26)	(1.29)
$Firm size$	−0.179**	0.004	0.044***	0.025
$Firm size$	(−2.28)	(0.16)	(6.56)	(0.99)
$RO A$	0.558***	−0.109	−0.150***	0.010
$RO A$	(3.43)	(−1.30)	(−7.01)	(0.17)
$Mar k et to book$	0.001	−0.000	−0.000	0.000
$Mar k et to book$	(1.01)	(−1.47)	(−0.12)	(0.98)
$Leverage$	−0.540***	−0.068**	−0.012	0.041
$Leverage$	(−3.35)	(−1.99)	(−1.07)	(1.26)
$Big auditor$	−0.289***	−0.068	−0.012	0.038
$Big auditor$	(−2.58)	(−0.97)	(−1.51)	(1.07)
$Constant$	−0.893***	−0.140**	−0.169***	−0.061
$Constant$	(−2.64)	(−2.37)	(−6.37)	(−0.51)
$Year dummies$	Yes	Yes	Yes	Yes
$Industry dummies$	Yes	Yes	Yes	Yes
$Size dummies$	Yes	Yes	Yes	Yes
$N$	26,183	26,183	26,183	26,183

	Model 9	Model 10	Model 11	Model 12
	Earnings surprise	Abnormal discretionary accruals	Abnormal production costs	Abnormal decreases in discretionary expenses
Between-firm effects
$IO$	0.506***	0.004	−0.060***	−0.110**
$IO$	(4.48)	(0.21)	(−4.27)	(−2.29)
$Firm size$	−0.048	0.011	0.034***	0.025
$Firm size$	(−0.75)	(0.67)	(6.17)	(1.09)
$RO A$	0.510***	−0.034	−0.026***	0.116
$RO A$	(3.62)	(−1.43)	(−4.56)	(1.39)
$Mar k et to book$	−0.001	0.001	−0.001**	−0.004**
$Mar k et to book$	(−0.28)	(1.31)	(−2.12)	(−2.08)
$Leverage$	−0.236**	−0.039*	0.053***	−0.082
$Leverage$	(−2.05)	(−1.66)	(3.55)	(−1.31)
$Big auditor$	−0.175**	0.054**	−0.080***	−0.171***
$Big auditor$	(−2.14)	(2.44)	(−6.75)	(−3.26)
Within-firm effects
$IO$	0.117	0.033	0.002	0.030
$IO$	(0.75)	(1.17)	(0.26)	(1.29)
$Firm size$	−0.179**	0.004	0.044***	0.025
$Firm size$	(−2.28)	(0.16)	(6.56)	(0.99)
$RO A$	0.558***	−0.109	−0.150***	0.010
$RO A$	(3.43)	(−1.30)	(−7.01)	(0.17)
$Mar k et to book$	0.001	−0.000	−0.000	0.000
$Mar k et to book$	(1.01)	(−1.47)	(−0.12)	(0.98)
$Leverage$	−0.540***	−0.068**	−0.012	0.041
$Leverage$	(−3.35)	(−1.99)	(−1.07)	(1.26)
$Big auditor$	−0.289***	−0.068	−0.012	0.038
$Big auditor$	(−2.58)	(−0.97)	(−1.51)	(1.07)
$Constant$	−0.893***	−0.140**	−0.169***	−0.061
$Constant$	(−2.64)	(−2.37)	(−6.37)	(−0.51)
$Year dummies$	Yes	Yes	Yes	Yes
$Industry dummies$	Yes	Yes	Yes	Yes
$Size dummies$	Yes	Yes	Yes	Yes
$N$	26,183	26,183	26,183	26,183

Note(s): Reported results include the coefficients and t-values in parentheses. The results of Models 10, 11, and 12 are based on robust standard errors. *, **, and ***denote significance levels of 10, 5, and 1%, respectively. Industry dummies are based on the two-digit SIC codes. Size dummies are based on decile groups of the variable Firm size

Source(s): Table created by authors

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