Analyst Coverage, Earnings Management and Financial Development: An International Study
Additional information
Authors
Degeorge F.,
Ding Y.,
Jeanjean T.,
Stolowy H.
Type
Journal Article
Year
2013
Language
English
Abstract
Using data from 21 countries, this paper analyzes the relation among analyst coverage, earnings management and financial development in an international context. We document that the effectiveness of financial analysts as monitors increases with a country’s financial development (FD). We find that in high-FD countries, increased within-firm analyst coverage results in less earnings management. Such is not the case in low-FD countries. Our results are economically significant and robust to reverse causality checks. Our findings illustrate one mechanism through which financial development mitigates the cost of monitoring firms and curbs earnings management.
Journal
Journal of Accounting and Public Policy
Volume
32
Number
1
Month
January
Start page number
1
End page number
25
