Is short term debt maturity linked to real earning management?
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Ph.D., University of Economics and Law, Ho Chi Minh City, Vietnam; and Vietnam National University, Ho Chi Minh City, Vietnam
Ph.D., Assoc. Prof.,University of Economics and Law, Ho Chi Minh City, Vietnam; and Vietnam National University, Ho Chi Minh City, Vietnam
M.Econ., University of Economics and Law, Ho Chi Minh City, Vietnam; and Vietnam National University, Ho Chi Minh City, Vietnam
Online publication date: 2022-09-08
Management 2022;26(1):189-203
This paper explores the association between the maturity of short-term debt and real earnings management in the context of an emerging market. We use a panel dataset of listed firms in Vietnam over the period from 2009 to 2017 and employ conventional methods for panel data analysis. Our work contributes by documenting a non-linear relationship between short-term debt maturity and manipulation of earnings. In particular, businesses prefer to refrain from manipulating earnings at low short-term debt maturity levels but are likely to manage them at higher short-term debt maturity levels. Under a battery of robustness evaluations, this result remains unchanged. This means that investors/lenders of firms should be vigilant with the information recorded on financial statements because managers can manage corporate earnings, especially at high short-term debt levels.
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ISSN:1429-9321 (1997-2019)
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