The effect of ownership type on earnings management - Evidence in Ho Chi Minh stock market
Abstract
Ownership structure has long been a measure to deal with agency problems. The purpose of this study is to examine the relationship between the variety types of ownership types: family, institution, external block-holders, state-owned, and earnings management. A new model based on the key paper of San Martin Reyna (2018) was conducted to test the sample including 250 listed firms on Ho Chi Minh stock market for the five-year period 2013-2017 (N=1250). Earnings management is measured by a cross-sectional version of Jones model (1991). The Generalized Methods of Moments (GMM) is included in the research approach. Results reveal the contribution of family state ownership on decreasing earnings management, but company size is considered as a control variable. The findings are supported by previous literature that ownership type is an effective mechanism diminishing earnings management through closer involvement in decision making. For the corporate governance, the study serves to improve companies’ strategies in monitoring as well as to eliminate threat of manipulation financial information.