This paper studies how the investment horizon of institutional investors affects firms' earnings management strategy in terms of trade-off decisions between accrual management and operational adjustment. We find that when overall earnings management motives are held fixed, firms in which long-term investors hold large stakes are more likely to manage earnings by adjusting operational decisions than by manipulating accruals. The preference for real earnings management is more pronounced when long-term investors face performance pressures and when they have a strong influence on managers. We further document that real earnings management helps smooth earnings, and the future adverse consequences of operational adjustment are relatively less severe for firms with a greater proportion of long-term investors than for those with more short-term investors. Our findings are robust to the endogenous choice of ownership structure. Overall, the evidence suggests that firms choose earnings management methods to meet the earnings expectations of institutional investors, who have different earnings target windows.

中文翻译：

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放眼长远：投资者交易视野和盈余管理策略

本文从权责发生制管理和经营调整之间的权衡决策角度研究了机构投资者的投资期限如何影响企业的盈余管理策略。我们发现，当整体盈余管理动机保持不变时，长期投资者持有大量股份的公司更有可能通过调整运营决策而不是操纵应计项目来管理盈余。当长期投资者面临业绩压力并且对经理人有强大影响力时，对实际盈余管理的偏好更为明显。我们进一步证明实际盈余管理有助于平滑盈余，对于长期投资者比例较高的公司而言，运营调整的未来不利后果相对于短期投资者较多的公司而言相对较轻。我们的研究结果对所有权结构的内生选择是稳健的。总体而言，有证据表明，公司选择盈余管理方法是为了满足机构投资者的盈余预期，他们有不同的盈余目标窗口。