Purpose

This paper aims to investigate the dynamics of repurchase-based earnings management vis-à-vis other real activities manipulations during the 2007–2008 financial crisis.

Design/methodology/approach

This paper adopts a Probit model to regress alternate real earnings management (REM) methods on a dummy variable indicating whether a firm falls in the crisis event window or not, during our 15-year sample period. This paper also detects switches made by suspected firms from repurchasing to other REM tools such as reducing discretionary expenditures.

Findings

This paper provides solid evidence indicating that firms suspected of earnings management have the tendency to decrease accretive share repurchases after the onset of the crisis. Conversely, the above pattern is neither observed in non-suspect firms nor over non-crisis periods. A further investigation documents that firms that switch REM during crisis can be characterized by less cash holding, smaller size, more severe liquidity shortage and/or tighter financial constraint.

Originality/value

This paper contributes to the literature on understanding the respective and interactive implications of both share repurchases and global financial crisis on firms’ REM activities.

中文翻译：

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实际盈余管理如何应对2007-2008年的金融危机？

目的

本文旨在研究2007-2008年金融危机期间基于回购的盈余管理相对于其他实际活动操纵的动态。

设计/方法/方法

本文采用Probit模型，对15年样本期内指示公司是否陷入危机事件窗口的虚拟变量进行回归，以替代实际收入管理（REM）方法。本文还检测了可疑公司从回购到其他REM工具的转换，例如减少了可自由支配的支出。

发现

本文提供了有力的证据表明，在危机爆发后，怀疑有盈余管理的公司有减少回购增值股票的趋势。相反，在没有怀疑的公司或在非危机时期都没有观察到上述模式。进一步的调查表明，在危机期间更换REM的公司的特点是现金持有量减少，规模较小，流动性短缺更为严重和/或财务约束更加严格。

创意/价值

本文为了解有关股票回购和全球金融危机对企业的REM活动的相互影响的文献做出了贡献。