Table 7 Earnings management and...

Table 7

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

	Model 13	Model 14	Model 15	Model 16
	Earnings surprise	Abnormal discretionary accruals	Abnormal production costs	Abnormal decreases in discretionary expenses
Between-firm effects
$IO$	1.711***	0.276***	−0.022	−0.563*
$IO$	(3.90)	(2.63)	(−0.37)	(−1.67)
${IO}^{2}$	−1.144***	−0.267***	−0.037	0.451
${IO}^{2}$	(−2.85)	(−2.78)	(−0.67)	(1.50)
$Firm size$	−0.063	0.008	0.034***	0.026
$Firm size$	(−0.97)	(0.49)	(6.16)	(1.15)
$RO A$	0.489***	−0.035	−0.026***	0.118
$RO A$	(3.46)	(−1.45)	(−4.51)	(1.39)
$Mar k et to book$	−0.000	0.001	−0.001**	−0.004**
$Mar k et to book$	(−0.21)	(1.34)	(−2.11)	(−2.13)
$Leverage$	−0.229**	−0.036	0.054***	−0.087
$Leverage$	(−1.99)	(−1.58)	(3.59)	(−1.39)
$Big auditor$	−0.181**	0.052**	−0.080***	−0.166***
$Big auditor$	(−2.21)	(2.37)	(−6.72)	(−3.25)
Within-firm effects
$IO$	−0.289	0.122	0.002	−0.175*
$IO$	(−0.58)	(1.12)	(0.08)	(−1.94)
${IO}^{2}$	0.359	−0.081	−0.000	0.187***
${IO}^{2}$	(0.85)	(−1.02)	(−0.01)	(2.61)
$Firm size$	−0.204***	−0.000	0.044***	0.029
$Firm size$	(−2.58)	(0.00)	(6.52)	(1.13)
$RO A$	0.563***	−0.108	−0.150***	0.011
$RO A$	(3.46)	(−1.29)	(−7.00)	(0.18)
$Mar k et to book$	0.001	−0.000	−0.000	0.000
$Mar k et to book$	(1.01)	(−1.47)	(−0.12)	(0.99)
$Leverage$	−0.552***	−0.068**	−0.012	0.041
$Leverage$	(−3.42)	(−2.00)	(−1.08)	(1.26)
$Big auditor$	−0.291***	−0.067	−0.012	0.036
$Big auditor$	(−2.59)	(−0.97)	(−1.51)	(1.03)
$Constant$	−1.062***	−0.179***	−0.175***	0.015
$Constant$	(−3.09)	(−2.96)	(−5.94)	(0.10)
$Year dummies$	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 13	Model 14	Model 15	Model 16
	Earnings surprise	Abnormal discretionary accruals	Abnormal production costs	Abnormal decreases in discretionary expenses
Between-firm effects
$IO$	1.711***	0.276***	−0.022	−0.563*
$IO$	(3.90)	(2.63)	(−0.37)	(−1.67)
${IO}^{2}$	−1.144***	−0.267***	−0.037	0.451
${IO}^{2}$	(−2.85)	(−2.78)	(−0.67)	(1.50)
$Firm size$	−0.063	0.008	0.034***	0.026
$Firm size$	(−0.97)	(0.49)	(6.16)	(1.15)
$RO A$	0.489***	−0.035	−0.026***	0.118
$RO A$	(3.46)	(−1.45)	(−4.51)	(1.39)
$Mar k et to book$	−0.000	0.001	−0.001**	−0.004**
$Mar k et to book$	(−0.21)	(1.34)	(−2.11)	(−2.13)
$Leverage$	−0.229**	−0.036	0.054***	−0.087
$Leverage$	(−1.99)	(−1.58)	(3.59)	(−1.39)
$Big auditor$	−0.181**	0.052**	−0.080***	−0.166***
$Big auditor$	(−2.21)	(2.37)	(−6.72)	(−3.25)
Within-firm effects
$IO$	−0.289	0.122	0.002	−0.175*
$IO$	(−0.58)	(1.12)	(0.08)	(−1.94)
${IO}^{2}$	0.359	−0.081	−0.000	0.187***
${IO}^{2}$	(0.85)	(−1.02)	(−0.01)	(2.61)
$Firm size$	−0.204***	−0.000	0.044***	0.029
$Firm size$	(−2.58)	(0.00)	(6.52)	(1.13)
$RO A$	0.563***	−0.108	−0.150***	0.011
$RO A$	(3.46)	(−1.29)	(−7.00)	(0.18)
$Mar k et to book$	0.001	−0.000	−0.000	0.000
$Mar k et to book$	(1.01)	(−1.47)	(−0.12)	(0.99)
$Leverage$	−0.552***	−0.068**	−0.012	0.041
$Leverage$	(−3.42)	(−2.00)	(−1.08)	(1.26)
$Big auditor$	−0.291***	−0.067	−0.012	0.036
$Big auditor$	(−2.59)	(−0.97)	(−1.51)	(1.03)
$Constant$	−1.062***	−0.179***	−0.175***	0.015
$Constant$	(−3.09)	(−2.96)	(−5.94)	(0.10)
$Year dummies$	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 14, 15, and 16 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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