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05.11.2022

The trilogy of economic policy uncertainty, earnings management and firm performance: empirical evidence from France

verfasst von: Ines Kahloul, Jocelyn Grira, Khawla Hlel

Erschienen in: Journal of Economics and Finance | Ausgabe 1/2023

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Abstract

This paper investigates the effect of earnings management practices on firm performance and focuses on how economic policy uncertainty (EPU) moderates the association between earnings management and firm performance. The analysis is based on a sample of French listed companies on the CAC ALL tradable index for the period from 2010 to 2017. Our results show that earnings management is positively associated with firm performance. This finding suggests that accrual- based earnings management, real earnings management and classification shifting are beneficial when managers use accounting choices to reduce agency costs and create value for shareholders. We also find that high EPU triggers a credible signal of lower disclosure quality. It plays an important role in promoting the opportunistic use of earnings management, which harms firm performance. This study is interesting for potential investors, since it underlines the negative effect of managerial opportunistic behaviour on firm performance under policy uncertainty.

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Metadaten
Titel
The trilogy of economic policy uncertainty, earnings management and firm performance: empirical evidence from France
verfasst von
Ines Kahloul
Jocelyn Grira
Khawla Hlel
Publikationsdatum
05.11.2022
Verlag
Springer US
Erschienen in
Journal of Economics and Finance / Ausgabe 1/2023
Print ISSN: 1055-0925
Elektronische ISSN: 1938-9744
DOI
https://doi.org/10.1007/s12197-022-09605-8

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