[go: up one dir, main page]

IDEAS home Printed from https://ideas.repec.org/a/bla/jfinan/v63y2008i2p947-986.html
   My bibliography  Save this article

Earnings Management and Firm Performance Following Open‐Market Repurchases

Author

Listed:
  • GUOJIN GONG
  • HENOCK LOUIS
  • AMY X. SUN
Abstract
Both post‐repurchase abnormal returns and reported improvement in operating performance are driven, at least in part, by pre‐repurchase downward earnings management rather than genuine growth in profitability. The downward earnings management increases with both the percentage of the company that managers repurchase and CEO ownership. Pre‐repurchase abnormal accruals are also negatively associated with future performance, with the association driven mainly by those firms that report the largest income‐decreasing abnormal accruals. The study suggests that one reason firms experience post‐repurchase abnormal returns is that post‐repurchase realized earnings growth exceeds expectations formed on the basis of pre‐repurchase deflated earnings numbers.

Suggested Citation

  • Guojin Gong & Henock Louis & Amy X. Sun, 2008. "Earnings Management and Firm Performance Following Open‐Market Repurchases," Journal of Finance, American Finance Association, vol. 63(2), pages 947-986, April.
  • Handle: RePEc:bla:jfinan:v:63:y:2008:i:2:p:947-986
    DOI: 10.1111/j.1540-6261.2008.01336.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1540-6261.2008.01336.x
    Download Restriction: no

    File URL: https://libkey.io/10.1111/j.1540-6261.2008.01336.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jfinan:v:63:y:2008:i:2:p:947-986. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/afaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.