Purpose

The purpose of this paper is to examine whether capital structure matters for earnings management of microfinance institutions.

Design/methodology/approach

The empirical study is conducted using a sample of 575 MFIs over 2007 to 2015, we determined in the first step the discretionary part of provision for loan impairment. In the second step, we examine the effect of debt and donated equity on discretionary provision for loan impairment.

Findings

We found robust evidence that MFIs manage their earnings for external finance purposes. Debt exhibits a negative effect on earnings management for both profit and nonprofit MFIs. However, donated equity incites managers of MFIs to engage this practice in nonprofit MFIs.

Practical implications

Findings could be valuable to fund providers and investors who should consider accounting information quality in order to reach a better investment decision.

Originality/value

This paper is among the few to explore earnings management motivation of MFIs and to determine the role of external financing on earnings management practice.

中文翻译：

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小额信贷机构的资本结构和收益质量

目的

本文的目的是检验资本结构对小额信贷机构的盈余管理是否重要。

设计/方法/方法

实证研究使用 2007 年至 2015 年期间的 575 家小额信贷机构样本进行，我们在第一步确定了贷款减值准备的可自由支配部分。在第二步中，我们考察了债务和捐赠股权对贷款减值的酌情准备的影响。

发现

我们发现强有力的证据表明，小额信贷机构为外部融资目的管理其收益。债务对盈利性和非营利性小额信贷机构的盈余管理都有负面影响。然而，捐赠的股权会促使小额信贷机构的经理在非营利性小额信贷机构中从事这种做法。

实际影响

调查结果可能对基金提供者和投资者有价值，他们应该考虑会计信息质量以做出更好的投资决策。

原创性/价值

本文是少数探讨小额信贷机构盈余管理动机和确定外部融资在盈余管理实践中的作用的论文之一。