Does Real Earnings Management Explain Cost Of Debt? Evidence ...

Khuong, Nguyen Vinh and Liem, Nguyen Thanh and Dung, Bui Thi Ngan (2021) Does real earnings management explain cost of debt? evidence from an emerging economy / Nguyen Vinh Khuong, Nguyen Thanh Liem and Bui Thi Ngan Dung. Asia-Pacific Management Accounting Journal (APMAJ), 16 (3): 16. pp. 221-236. ISSN 2550-1631

Official URL: https://apmaj.uitm.edu.my

Abstract

This study tested the relationship between real earnings management and debt cost in Vietnam, a developing market. We used the Generalized Method of Moments (GMM) Technique on a sample of 241 listed firms in Vietnam for 7 years from 2010 to 2016, with a total of 1687 observations collected. The regression result showed a positive association between real earnings management and cost of debt. The results of the study revealed that real earnings management is shown through the rising transactions and directly affected financial reports, thereby affecting creditors by affecting their cost of debt. This can be seen as the driving force for listed companies to increase the quality of their financial information. Our study only focused on earnings manipulation through real earnings management (REM) to affect transaction costs in Vietnam. The research explains the relationship between managerial behavior (real earnings management) and direct influence on creditors’ behavior (cost of debt capital). The result would give outside stakeholders an overall view about the usage of REM in Vietnamese listed firms, the reasonable action of investors, financial institutions, banks, etc on the debt market to reduce risk and the signal of warning for regulators and policy-makers.

Metadata

Item Type:	Article
Creators:	CreatorsEmail / ID Num.Khuong, Nguyen Vinhkhuongnv@uel.edu.vnLiem, Nguyen ThanhUNSPECIFIEDDung, Bui Thi NganUNSPECIFIED
Subjects:	H Social Sciences > HG Finance > Credit. Debt. LoansH Social Sciences > HG Finance > Credit. Debt. Loans > Commercial credit. Commercial loans. Credit management
Divisions:	Universiti Teknologi MARA, Shah Alam > Accounting Research Institute (ARI)
Journal or Publication Title:	Asia-Pacific Management Accounting Journal (APMAJ)
UiTM Journal Collections:	UiTM Journal > Asia-Pacific Management Accounting Journal (APMAJ)
ISSN:	2550-1631
Volume:	16
Number:	3
Page Range:	pp. 221-236
Keywords:	earnings management, cost of debt capital
Date:	December 2021
URI:	https://ir.uitm.edu.my/id/eprint/56531

Edit Item

Download

Text 56531.pdf Download (594kB)

ID Number

56531

Indexing

Statistic

Statistic details