TY - JOUR
T1 - Earnings management, capital structure, and the role of corporate governance
T2 - Evidence from sub-Saharan Africa
AU - Okyere, Sarah Anobil
AU - Fiador, Vera
AU - Sarpong-Kumankoma, Emmanuel
N1 - Publisher Copyright:
© 2021 John Wiley & Sons, Ltd.
PY - 2021/9
Y1 - 2021/9
N2 - This study investigates the effect of earnings management and corporate governance on the capital structure decision of firms. We utilized data of non-financial firms from selected sub-Saharan African countries over the period 2008 to 2018. Both fixed and random effect regressions were the methods of analysis employed. Our findings indicate that earnings management is associated with low equity usage and by implication, high leverage levels among firms. Importantly, the presence of corporate governance was found to mitigate the high leverage implication of earnings management. We therefore recommend an improvement in corporate governance practices to minimize the occurrence of earnings management.
AB - This study investigates the effect of earnings management and corporate governance on the capital structure decision of firms. We utilized data of non-financial firms from selected sub-Saharan African countries over the period 2008 to 2018. Both fixed and random effect regressions were the methods of analysis employed. Our findings indicate that earnings management is associated with low equity usage and by implication, high leverage levels among firms. Importantly, the presence of corporate governance was found to mitigate the high leverage implication of earnings management. We therefore recommend an improvement in corporate governance practices to minimize the occurrence of earnings management.
UR - http://www.scopus.com/inward/record.url?scp=85102260525&partnerID=8YFLogxK
U2 - 10.1002/mde.3324
DO - 10.1002/mde.3324
M3 - Article
AN - SCOPUS:85102260525
SN - 0143-6570
VL - 42
SP - 1525
EP - 1538
JO - Managerial and Decision Economics
JF - Managerial and Decision Economics
IS - 6
ER -