Product Market Power , Industry Structure , and Corporate Earnings Management

@inproceedings{Datta2012ProductMP,
  title={Product Market Power , Industry Structure , and Corporate Earnings Management},
  author={Sudip Datta and Mai Iskandar-Datta and Vivek Singh},
  year={2012}
}
This is the first study to establish a link between product market power of firms and the degree of earnings management. We hypothesize and document a significant and robust association between (a) a firm’s product market pricing power and its degree of earnings management, and (b) industry competitiveness and the degree of earnings management in the industry. Our study reveals that firms with inferior product market pricing power engage in greater discretionary earnings accruals, adding a new… CONTINUE READING

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