Do powerful CEOs matter for earnings quality? Evidence from Bangladesh
This study investigates the effects of powerful Chief Executive Officers (CEOs) on earnings quality in a setting where CEOs have strong dominance over other top executives and occasionally attempt to exert their influence over corporate regulatory bodies. Using 10-year longitudinal data for the peri...
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Public Library of Science
2023
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my.um.eprints.387822023-11-28T00:00:40Z http://eprints.um.edu.my/38782/ Do powerful CEOs matter for earnings quality? Evidence from Bangladesh Arif, H. M. Mustapha, Mohd Zulkhairi Jalil, Azlina Abdul Q Science (General) This study investigates the effects of powerful Chief Executive Officers (CEOs) on earnings quality in a setting where CEOs have strong dominance over other top executives and occasionally attempt to exert their influence over corporate regulatory bodies. Using 10-year longitudinal data for the period from 2010 to 2019 and 1,395 firm-year observations from listed non-financial firms in Bangladesh, we found that CEOs' political power and CEOs with high structural and expert power have a significant detrimental effect on earnings quality. Ownership and prestige power have an insignificant impact on earnings quality. These powerful CEOs use accrual and real activity manipulation techniques together to manage the earnings. This study uses the system-generalized method of moment estimates for estimation purposes, and the results remain robust when alternative earnings quality proxies are used. Taken together, our results suggest that CEOs' political duality (i.e., serving simultaneously as a member of parliament and a CEO) should be restricted and that a CEO's tenure should be limited to a reasonable period. This research adds to the existing body of knowledge by offering empirical support for CEO power dynamics on earnings quality, specifically political and prestige power. Public Library of Science 2023-01 Article PeerReviewed Arif, H. M. and Mustapha, Mohd Zulkhairi and Jalil, Azlina Abdul (2023) Do powerful CEOs matter for earnings quality? Evidence from Bangladesh. PLoS ONE, 18 (1). ISSN 1932-6203, DOI https://doi.org/10.1371/journal.pone.0276935 <https://doi.org/10.1371/journal.pone.0276935>. 10.1371/journal.pone.0276935 |
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Universiti Malaya |
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UM Library |
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Institutional Repository |
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Asia |
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Malaysia |
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Universiti Malaya |
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UM Research Repository |
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Q Science (General) |
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Q Science (General) Arif, H. M. Mustapha, Mohd Zulkhairi Jalil, Azlina Abdul Do powerful CEOs matter for earnings quality? Evidence from Bangladesh |
| description |
This study investigates the effects of powerful Chief Executive Officers (CEOs) on earnings quality in a setting where CEOs have strong dominance over other top executives and occasionally attempt to exert their influence over corporate regulatory bodies. Using 10-year longitudinal data for the period from 2010 to 2019 and 1,395 firm-year observations from listed non-financial firms in Bangladesh, we found that CEOs' political power and CEOs with high structural and expert power have a significant detrimental effect on earnings quality. Ownership and prestige power have an insignificant impact on earnings quality. These powerful CEOs use accrual and real activity manipulation techniques together to manage the earnings. This study uses the system-generalized method of moment estimates for estimation purposes, and the results remain robust when alternative earnings quality proxies are used. Taken together, our results suggest that CEOs' political duality (i.e., serving simultaneously as a member of parliament and a CEO) should be restricted and that a CEO's tenure should be limited to a reasonable period. This research adds to the existing body of knowledge by offering empirical support for CEO power dynamics on earnings quality, specifically political and prestige power. |
| format |
Article |
| author |
Arif, H. M. Mustapha, Mohd Zulkhairi Jalil, Azlina Abdul |
| author_facet |
Arif, H. M. Mustapha, Mohd Zulkhairi Jalil, Azlina Abdul |
| author_sort |
Arif, H. M. |
| title |
Do powerful CEOs matter for earnings quality? Evidence from Bangladesh |
| title_short |
Do powerful CEOs matter for earnings quality? Evidence from Bangladesh |
| title_full |
Do powerful CEOs matter for earnings quality? Evidence from Bangladesh |
| title_fullStr |
Do powerful CEOs matter for earnings quality? Evidence from Bangladesh |
| title_full_unstemmed |
Do powerful CEOs matter for earnings quality? Evidence from Bangladesh |
| title_sort |
do powerful ceos matter for earnings quality? evidence from bangladesh |
| publisher |
Public Library of Science |
| publishDate |
2023 |
| url |
http://eprints.um.edu.my/38782/ |
| _version_ |
1783876673514504192 |
| score |
13.251813 |