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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...
Autores principales: | , , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Public Library of Science
2023
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9858436/ https://www.ncbi.nlm.nih.gov/pubmed/36662870 http://dx.doi.org/10.1371/journal.pone.0276935 |
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author | Arif, H. M. Mustapha, Mohd Zulkhairi Abdul Jalil, Azlina |
author_facet | Arif, H. M. Mustapha, Mohd Zulkhairi Abdul Jalil, Azlina |
author_sort | Arif, H. M. |
collection | PubMed |
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 | Online Article Text |
id | pubmed-9858436 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2023 |
publisher | Public Library of Science |
record_format | MEDLINE/PubMed |
spelling | pubmed-98584362023-01-21 Do powerful CEOs matter for earnings quality? Evidence from Bangladesh Arif, H. M. Mustapha, Mohd Zulkhairi Abdul Jalil, Azlina PLoS One Research Article 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 2023-01-20 /pmc/articles/PMC9858436/ /pubmed/36662870 http://dx.doi.org/10.1371/journal.pone.0276935 Text en © 2023 Arif et al https://creativecommons.org/licenses/by/4.0/This is an open access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/) , which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. |
spellingShingle | Research Article Arif, H. M. Mustapha, Mohd Zulkhairi Abdul Jalil, Azlina Do powerful CEOs matter for earnings quality? Evidence from Bangladesh |
title | 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_short | Do powerful CEOs matter for earnings quality? Evidence from Bangladesh |
title_sort | do powerful ceos matter for earnings quality? evidence from bangladesh |
topic | Research Article |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9858436/ https://www.ncbi.nlm.nih.gov/pubmed/36662870 http://dx.doi.org/10.1371/journal.pone.0276935 |
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