Earnings Smoothing, Governance and Liquidity: International Evidence

@article{Lafond2007EarningsSG,
  title={Earnings Smoothing, Governance and Liquidity: International Evidence},
  author={R. Lafond and M. Lang and H. A. Skaife},
  journal={Corporate Finance: Governance},
  year={2007}
}
  • R. Lafond, M. Lang, H. A. Skaife
  • Published 2007
  • Business
  • Corporate Finance: Governance
  • We examine the relation between earnings smoothing, governance and liquidity for a sample of non-U.S. firms. We divide smoothing into innate and discretionary components, and find that discretionary smoothing is increasing in incentives to smooth (greater tax-book conformity, concentrated ownership, related party transactions and weak overall governance) and decreasing in oversight (investor protection, analyst following and ADR listing). Given the potential for smoothing to affect transparency… CONTINUE READING
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