The relationship between managerial ability (alternate measure) and earnings management by 2SLS regression
| Variables | EM_ACC |
|---|---|
| MA_Score | 0.0274* (0.0142) |
| FirmAge | 0.0004 (0.0004) |
| TobinsQ | 0.0138*** (0.0012) |
| HHI | −0.0115 (0.0078) |
| Boardsize | −0.0019 (0.0012) |
| DebttoAssetRatio | 0.0816*** (0.0110) |
| ReturnonAssets | −0.3580*** (0.0426) |
| Size | −0.0013 (0.0010) |
| BoardInde | 0.00084 (0.0364) |
| Top10Audit | −0.0121*** (0.0036) |
| ZScore | 0.0190*** (0.0011) |
| NOA | −0.0002 (0.0004) |
| Constant | 0.0013 (0.0228) |
| Observations | 5,687 |
| R-squared | 0.077 |
| Durbin | 6.13668 (p = 0.0132) |
| Wu-Hausman | 6.12819 (p = 0.0133) |
| Sargan test | 105.526 (p = 0.0000) |
| Basman test | 107.218 (p = 0.0000) |
| Variables | EM_ACC |
|---|---|
| MA_Score | 0.0274 |
| FirmAge | 0.0004 (0.0004) |
| TobinsQ | 0.0138 |
| −0.0115 (0.0078) | |
| Boardsize | −0.0019 (0.0012) |
| DebttoAssetRatio | 0.0816 |
| ReturnonAssets | −0.3580 |
| Size | −0.0013 (0.0010) |
| BoardInde | 0.00084 (0.0364) |
| Top10Audit | −0.0121 |
| ZScore | 0.0190 |
| −0.0002 (0.0004) | |
| Constant | 0.0013 (0.0228) |
| Observations | 5,687 |
| R-squared | 0.077 |
| Durbin | 6.13668 ( |
| Wu-Hausman | 6.12819 ( |
| Sargan test | 105.526 ( |
| Basman test | 107.218 ( |
Where EM_AC = earning management (accrual based); MA = managerial ability; REM_CFO = real earning management (reporting cash flow); REM_DE = real earning management (discretionary expenses); REM_PE = real earning management (production cost); HHI = Herfindahl–Hirschman index; and NOA = net operating assets; standard errors in parentheses; *** p < 0.01, * p < 0.1