Peer performance and earnings management

• Main Authors: Du, Qianqian, Shen, Rui
• Other Authors: Nanyang Business School
• Format: Article
• Language: English
• Published: 2019
• Subjects: DRNTU::Business::Management; Earnings Management; Peer Performance
• Online Access: https://hdl.handle.net/10356/90120; http://hdl.handle.net/10220/48399; https://doi.org/10.21979/N9/XO8MB3
• Institution: Nanyang Technological University

This paper studies how peer performance affects firms’ earnings management decisions. Using peer firms’ idiosyncratic returns as an exogenous peer performance measure and the instrumental variable approach, we find that higher peer performance leads to higher discretionary accruals. This effect is s...