Abstract

This study investigates real earnings management in family firms and further examines the moderating effects of the independence and compensation of directors. Based on a sample of 106 non-financial public listed firms over 5 years in Saudi Arabia, the empirical results show that family firms are positively linked to real earnings management. This result supports the entrenchment hypothesis that family firms have lower earnings quality due to manipulation in real activities. Further, we found evidence that the proportion of independent directors and the compensation paid to directors both interacted in family firms to reduce real earnings management. Our findings suggest that increasing the proportion of independent directors and paying higher compensation to directors are one workable way for family firms to mitigate their real earnings management behaviour.

摘要

本研究调查了家族企业的实际盈余管理，并进一步检验了董事独立性和薪酬的调节作用。以沙特阿拉伯106家非金融类上市公司5年以上为样本，实证结果表明，家族企业与实际盈余管理正相关。这一结果支持了家族企业由于实际活动中的操纵而具有较低的盈利质量的防御假设。此外，我们发现有证据表明独立董事的比例和支付给董事的报酬在家族企业中相互影响，从而减少了实际盈余管理。