Asia-Pacific Journal of Business (아태비즈니스연구)

KNU The Institute of Management & Economy Research (강원대학교 경영경제연구소)
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The Effects of Cost Stickiness on Real Earnings Management: A Data Analysis of Export Marketers

  • Oh, Yu-Gyeom (SolBridge International School of Business, Woosong University) ;
  • Kim, Moon-Hong (Department of Raiload Management, Woosong University)
  • Received : 2022.08.31
  • Accepted : 2022.09.28
  • Published : 2022.09.30
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Abstract

Purpose - Export marketers may have incentives to attempt real earnings management to avoid low reported earnings. Therefore, we attempted to verify the relationship between cost stickiness and real earnings management in the context of export marketing. Design/methodology/approach - Data were collected from exporters that settle-accounts in December excluding financial businesses listed on the stock market from 2015 to 2019. Multiple regression analysis were employed to analyze the data. Findings - The results showed that there is a negative relationship between cost stickiness and real earnings management. In addition, the results showed that export marketers little attempt to offset the cost inefficiency caused by the increase in expense because of cost stickiness with opportunistic management activities through real earnings management. Rather, as the level of real earnings management appears lower, exporters showing cost stickiness are expected to report management performance based on actual marketing. Furthermore, exporters with a high level of managerial centrality or high managerial overconfidence little attempt to offset cost inefficiency caused by cost stickiness with real earnings management activities. Research implications or Originality - Our study is the first to investigate the quality of earnings information of exporters with cost stickiness. Based on the results, we suggested efficient marketing strategies for exporters.

Keywords

Acknowledgement

This study was supported by the research grant of Woosong University in 2022.

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