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URN etd-0821116-232616 Statistics This thesis had been viewed 474 times. Download 38 times. Author Ying-wei Chen Author's Email Address No Public. Department Management Business Administration Year 2015 Semester 2 Degree Master Type of Document Master's Thesis Language Chinese&English Page Count 133 Title THE EFFECT OF FINANCING CONSTRAINTS ON STOCK REPURCHASE-BASED EARNINGS MANAGEMENT Keyword Share repurchase Financing constraints Earnings management Earnings management Financing constraints Share repurchase Abstract This paper discusses the behavior of repurchase-based earnings management. Besides, earnings management is separated into accruals and real earnings management, and to find out the impact of financing constraint on the use of different earnings management technology. We find the presence of financing constraints discourages the use of repurchase-based earnings management. Firms with money may have greater probability to use share repurchases as earnings management mechanism.
This paper discusses the effect of financing constraints on earnings management. Our sample is from Taiwan Economic Journal of treasury stock database over the period from 2000 to 2014. According to HP_INDEX, we separated sample into 10 group from the lowest financing constraints to the highest financing constraints. After separating sample, we estimate logit model to analysis how financing constraints impact accretive share repurchase. Our study except financing constraints will affect chance of accretive repurchase share.
Our research shows firms with higher financing constraints use less accretive share purchase. Firm with high financing constraints would increase discretionary accruals to manage earnings. Because of using accruals to manage earnings won’t reduce cash flow, financing constraint firms would more likely use this earnings management technology. Companies facing financing constraints would change real earnings management activity to control earnings. We consider through reducing per fixed cost might control earnings well, so firms with financing constraints would try to control production cost.
Advisor Committee Ruey-shii Chen - advisor
Chi-chuan Wu - co-chair
Pi-shia Hung - co-chair
Files Date of Defense 2016-06-13 Date of Submission 2016-08-24