A Study of the Relationships between Corporate Governance, Earnings Management, and Bank Performance

• Main Authors: Chin-Tzu Lin, 林親慈
• Other Authors: Hsin-Hue Chang
• Format: Others
• Language: zh-TW
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/99676763599414235484

碩士 === 銘傳大學 === 財務金融學系碩士班 === 100 === Poor corporate governance has resulted in a lot of financial scandals, such as Lehman Brother’s bankruptcy. After the 2008 financial crisis, the authorities and investors have paid more attention on the issue of corporate governance. Corporate governance mechanisms briefly include earnings management, top management compensation, and independence of board. The mechanisms are interactive, few domestic studies, however, investigate the relationship between earnings management, top management compensation, independence of board and performance. Thus, the aim of this study is to build a simultaneous equations model to examine the links between earnings management and bank performance. A set of bank sample is obtained from Taiwan Economic Journal(TEJ). Due to the existence of endogenous relationship between earnings management and performance, this study uses a two-stage least square(2SLS) to exercise the estimation procedure. The results find that earnings management have a significantly positive effect on bank performance. Independence of board significantly negatively affects earnings management but top management compensation significantly positively affects earnings management.