A Study of Earnings Management on Issuing Depositary Receipt–The Case of Taiwan Corporation

• Main Authors: Lai, Tinghsuan, 賴庭萱
• Other Authors: Horng, Yuhsheng
• Format: Others
• Language: zh-TW
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/6jn8w5

碩士 === 靜宜大學 === 財務金融學系 === 102 === There are more and more alternatives of financing tools which companies can choose under the increasingly diversified international financial markets. Today, Global Depositary Receipt (GDR) has become one of the important financing alternatives. In this study I examine the earnings management behavior of the public listed companies of Taiwan Security Exchange that had issued GDRs between 1992 and 2012. I investigate whether companies carry out earnings management before and after issuing GDRs. In addition, this paper further explore the motivation of earnings management when companies issued GDRs, the relationship between earnings management and issuance markets of GDRs, and the relationship between earnings management and the industry type. This paper examines that whether companies engage in the operation of earnings management when they issue GDRs. Different from previous studies which focus on the accruals earnings management, this paper puts emphasis on the real earning management (REM). The empirical results only show that there is reverse real earnings management behavior two years before companies issue GDR. No further evidence shows that there is any real earnings management behavior during the rest of examined period of issuing GDRs. In addition, the empirical results also show that the larger size, the higher debt ratio, and the lower return on assets (ROA) of companies are more likely to carry out the real earnings management during the examined period of issuing GDRs. When adding place of GDRs issuance, the empirical results show that if companies issue GDRs in Luxembourg, they are less likely to carry out real earnings management than they issue GDRs in the other markets. When adding industry factor, the empirical results show that the electronics industry are more likely to engage in real earnings management than non-electronics industry.