Earnings quality effect of state antitakeover statutes

摘要: Abstract Existing theories suggest two opposite effects that antitakeover protection may have on earnings management: the exacerbating effect and mitigating effect. We use introduction of state laws during mid- to late-1980s as a natural experiment test relationship between quality. The results show firms incorporated in states passed lower magnitudes abnormal accruals higher levels informativeness post-passage periods, suggesting mitigates management enhances Further evidence shows reductions are concentrated with low firm-level serious agency problems, is likely be short-term duration.