The Influence of Earnings Management and Board Characteristics on Company Efficiency

Earnings management is a means by which managers manipulate earnings to conceal the true performance of a company. The characteristics of the board of directors can also influence firm performance. This study applies data envelopment analysis (DEA) and the Tobin regression model to investigate the i...

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Autores principales:	Hsueh-Li Huang, Lien-Wen Liang, Hai-Yen Chang, Hsiu-Yuan Hsu
Formato:	article
Lenguaje:	EN
Publicado:	MDPI AG 2021
Materias:	earnings management board characteristics window dressing company efficiency firm performance Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350
Acceso en línea:	https://doaj.org/article/504f22847fc7485a9239216061e2c531
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spelling	oai:doaj.org-article:504f22847fc7485a9239216061e2c5312021-11-11T19:22:25ZThe Influence of Earnings Management and Board Characteristics on Company Efficiency10.3390/su1321116172071-1050https://doaj.org/article/504f22847fc7485a9239216061e2c5312021-10-01T00:00:00Zhttps://www.mdpi.com/2071-1050/13/21/11617https://doaj.org/toc/2071-1050Earnings management is a means by which managers manipulate earnings to conceal the true performance of a company. The characteristics of the board of directors can also influence firm performance. This study applies data envelopment analysis (DEA) and the Tobin regression model to investigate the influence of earnings management and board characteristics on company efficiency. The data sample includes 396 Taiwanese electronics and biotechnology companies from 2009 to 2017. The results indicate that earnings management has an insignificant influence on company efficiency with mixed results on the interactions between earnings management and board characteristics. When companies practiced earnings management, director experiences, a higher proportion of female directors, and a higher number of board meetings increased company efficiency. In contrast, a higher number of independent directors and a higher attendance rate of the directors at the board meeting decreased company efficiency. The results of this study suggest that board diversity, more female directors, and meetings could still improve firm performance despite companies’ engagement in earnings management.Hsueh-Li HuangLien-Wen LiangHai-Yen ChangHsiu-Yuan HsuMDPI AGarticleearnings managementboard characteristicswindow dressingcompany efficiencyfirm performanceEnvironmental effects of industries and plantsTD194-195Renewable energy sourcesTJ807-830Environmental sciencesGE1-350ENSustainability, Vol 13, Iss 11617, p 11617 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	earnings management board characteristics window dressing company efficiency firm performance Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350
spellingShingle	earnings management board characteristics window dressing company efficiency firm performance Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350 Hsueh-Li Huang Lien-Wen Liang Hai-Yen Chang Hsiu-Yuan Hsu The Influence of Earnings Management and Board Characteristics on Company Efficiency
description	Earnings management is a means by which managers manipulate earnings to conceal the true performance of a company. The characteristics of the board of directors can also influence firm performance. This study applies data envelopment analysis (DEA) and the Tobin regression model to investigate the influence of earnings management and board characteristics on company efficiency. The data sample includes 396 Taiwanese electronics and biotechnology companies from 2009 to 2017. The results indicate that earnings management has an insignificant influence on company efficiency with mixed results on the interactions between earnings management and board characteristics. When companies practiced earnings management, director experiences, a higher proportion of female directors, and a higher number of board meetings increased company efficiency. In contrast, a higher number of independent directors and a higher attendance rate of the directors at the board meeting decreased company efficiency. The results of this study suggest that board diversity, more female directors, and meetings could still improve firm performance despite companies’ engagement in earnings management.
format	article
author	Hsueh-Li Huang Lien-Wen Liang Hai-Yen Chang Hsiu-Yuan Hsu
author_facet	Hsueh-Li Huang Lien-Wen Liang Hai-Yen Chang Hsiu-Yuan Hsu
author_sort	Hsueh-Li Huang
title	The Influence of Earnings Management and Board Characteristics on Company Efficiency
title_short	The Influence of Earnings Management and Board Characteristics on Company Efficiency
title_full	The Influence of Earnings Management and Board Characteristics on Company Efficiency
title_fullStr	The Influence of Earnings Management and Board Characteristics on Company Efficiency
title_full_unstemmed	The Influence of Earnings Management and Board Characteristics on Company Efficiency
title_sort	influence of earnings management and board characteristics on company efficiency
publisher	MDPI AG
publishDate	2021
url	https://doaj.org/article/504f22847fc7485a9239216061e2c531
work_keys_str_mv	AT hsuehlihuang theinfluenceofearningsmanagementandboardcharacteristicsoncompanyefficiency AT lienwenliang theinfluenceofearningsmanagementandboardcharacteristicsoncompanyefficiency AT haiyenchang theinfluenceofearningsmanagementandboardcharacteristicsoncompanyefficiency AT hsiuyuanhsu theinfluenceofearningsmanagementandboardcharacteristicsoncompanyefficiency AT hsuehlihuang influenceofearningsmanagementandboardcharacteristicsoncompanyefficiency AT lienwenliang influenceofearningsmanagementandboardcharacteristicsoncompanyefficiency AT haiyenchang influenceofearningsmanagementandboardcharacteristicsoncompanyefficiency AT hsiuyuanhsu influenceofearningsmanagementandboardcharacteristicsoncompanyefficiency
_version_	1718431528261779456

The Influence of Earnings Management and Board Characteristics on Company Efficiency

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