Foreign Ownership and Earnings Quality of Thai Listed Companies
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Published:
Aug 28, 2019
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Abstract
The objective of this research is to examine the effects of foreign ownership on earnings quality of Thai listed companies using a sample of 845 firm-year observations of listed companies on the Stock Exchange of Thailand over the period 2016 - 2017. This paper examines the earnings quality of foreign ownership and non-foreign ownership structured firms through the accounting conservatism model. This research employed multiple regression to analyze the results. The findings indicate that foreign ownership improves earnings quality of Thai listed companies.
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How to Cite
Phakdee, A., & Srijunpetch, S. (2019). Foreign Ownership and Earnings Quality of Thai Listed Companies. University of the Thai Chamber of Commerce Journal Humanities and Social Sciences, 39(3), 1–19. Retrieved from https://so06.tci-thaijo.org/index.php/utccjournalhs/article/view/159855
Section
Research Articles
ลิขสิทธิ์ของบทความ
ผลงานที่ได้รับการตีพิมพ์ถือเป็นลิขสิทธิ์ของมหาวิทยาลัยหอการค้าไทย ห้ามมิให้นำเนื้อหา ทัศนะ หรือข้อคิดเห็นใด ๆ ของผลงานไปทำซ้ำ ดัดแปลง หรือเผยแพร่ ไม่ว่าทั้งหมดหรือบางส่วนโดยไม่ได้รับอนุญาตเป็นลายลักษณ์อักษรจากมหาวิทยาลัยหอการค้าไทยก่อน
References
เกรียงไกร บุญเลิศอุทัย, และอนุวัฒน์ ภักดี. (2561). คุณลักษณะของคณะกรรมการความระมัดระวังทางบัญชี และผลการดำเนินงานของบริษัทจดทะเบียนในตลาดหลักทรัพย์แห่งประเทศไทย. วารสารวิชาชีพบัญชี, 14(43), 27-47.
นักลงทุนต่างชาติร้อยละ 32.8 จะขยายการลงทุนในไทย. (2559, 11 สิงหาคม). ฐานเศรษฐกิจ. สืบค้นจาก https://www.thansettakij.com/content/84240
นิพัฒน์ โพธิ์วิจิตร, พิรุณา ไบโลวัส, และฐิติมา สิทธิพงษ์พานิช. (2555). ผลกระทบของโครงสร้างผู้ถือหุ้นที่มีต่อการบริหารกำไรของบริษัทจดทะเบียนในตลาดหลักทรัพย์แห่งประเทศไทย. วารสารวิชาชีพบัญชี, 8(21): 20-40.
ประภาพร ณ นรงค์. (2549). ความสัมพันธ์ระหว่างโครงสร้างผู้ถือหุ้นในบริษัทที่จดทะเบียนในตลาดหลักทรัพย์แห่งประเทศไทย กับความสามารถในการทำกำไรทางบัญชี (วิทยานิพนธ์ปริญญามหาบัณฑิต ไม่ได้ตีพิมพ์). จุฬาลงกรณ์มหาวิทยาลัย, กรุงเทพฯ.
สัจจวัฒน์ จันทร์หอม, และศิลปพร ศรีจั่นเพชร. (2555). คุณภาพกำไรของบริษัทครอบครัวไทย วารสารวิชาชีพบัญชี, 8(21),78-88.
Ahmed, A. S., & Duellman, S. (2007). Accounting conservatism and board of director characteristics: An empirical analysis. Journal of Accounting and Economics, 43(2–3), 411–437.
Al-Sraheen, D. O. (2014). The influence of corporate ownership structure and board members’ skills on the accounting conservatism: Evidence from non-financial listed firms in Amman stock exchange. International Journal of Accounting and Financial Reporting, 4: 177-200
Ali, U., Noor, M., Khurshid, M. K., & Mahmood, A. (2015). Impact of firm size on earnings management: A study of textile sector of Pakistan. European Journal of Business and Management, 7(28), 47-56. Retrieved from https://dx.doi.org/10.2139/ssrn.2698317
Alzoubi, E. S. S. (2016). Ownership structure and earnings management: Evidence from Jordan. International Journal of Accounting & Information Management, 24(2), 135-161. doi.org/10.1108/IJAIM-06-2015-0031
An, Y. (2015). Dose foreign ownership increase financial performance quality? Asian Academy of Management Journal, 20(2), 81-101.
Ang, J. B. (2009) Foreign direct investment and its impact on the Thai economy: The role of financial development. Journal of Economics and Finance, 33, 316–323.
Ball, R., & Shivakumar, L. (2005). Earnings quality in UK private firms: Comparative loss recognition timeliness. Journal of Accounting and Economics, 39, 83–128.
Barton, J. & Simko, P. (2002). The balance sheet as an earnings management constraint. The Accounting Review, 77, 1-27.
Basu, S. (1997). The conservatism principle and the asymmetric timeliness of earnings. Journal of Accounting and Economics, 24, 3–37.
Becht, M., Franks, J., Mayer, C., & Rossi, S. (2009). Returns to shareholder activism: Evidence from a clinical study of the Hermes UK Focus Fund. Review of Financial Studies, 22, 3093- 3129.
Beuselinck, C., Blanco, B., & García-Lara, J. M. (2017). The role of foreign shareholders in disciplining financial reporting. Journal of Business Finance & Accounting, 44(5-6), 558-592.
Chhaochharia, V., Niessen-Ruenzi, A., & Kumar, A. (2012). Local investors and corporate governance. Journal of Accounting and Economics, 54, 42-67.
Dechow, P. M., & Dichev, I. (2002). The quality of accruals and earnings: The role of accrual estimation errors. Accounting Review, 77, 35–59.
Dechow, P. M., Ge, W., & Schrand, C. (2010). Understanding earnings quality: A review of the proxies, their determinants and their consequences. Journal of Accounting and Economics, 50, 344–401.
Dechow, P. M., Kothari, S. P., & Watts, R. L. (1998). The relation between earnings and cash flows. Journal of Accounting and Economics, 25, 133–168.
Fan, J., & Wong, T. J. (2002). Corporate ownership structure and the informativeness of accounting earnings in East Asia. Journal of Accounting & Economics, 33, 401–425.
Fang, V., Maffett, M., & Zhang, B. (2013). The effect of institutional investment on financial reporting comparability. Working paper.
Giannetti, M., & Laeven, L. (2009). Pension reform, ownership structure, and corporate governance: Evidence from a natural experiment. Review of Financial Studies, 22, 4091-4127.
Gillan, S., & Starks, L. (2003). Corporate governance, corporate ownership, and the role of institutional investors: A global perspective. Journal of Applied Finance, 13, 4-22.
Givoly, D., Hayn, C. K., & Katz, S. P. (2010). Does public ownership of equity improve earnings quality? Accounting Review, 85, 195–225.
Guo, J., Huang, P., Zhang, Y., & Zhou, N. (2015). Foreign ownership and real earnings management: Evidence from Japan. Journal of International Accounting Research, 14(2), 185-213.
Hartzell, J., & Starks, L. (2003). Institutional investors and executive compensation. Journal of Finance, 58, 2351-2374.
Ho, J. A. (2009). Association between board characteristics and accounting conservatism: Empirical evidence from Malaysia (Unpublished doctoral dissertation). Auckland University of Technology.
Ji, X. D., Ahmed, K., & Lu, W. (2015). The impact of corporate governance and ownership structure reforms on earnings quality in China. International Journal of Accounting & Information Management, 23(2), 169-198.
LaFond, R., & Roychowdhury, S. (2008). Managerial ownership and accounting conservatism. Journal of Accounting Research, 46(1), 101-135.
LaFond, R., & Watts, R. (2008). The information role of conservatism. The Accounting Review, 83, 447-478.
Lel, U. (2013). The role of foreign institutional investors in restraining earnings management activities across countries. Working paper.
Leuz, C., Lins, K., & Warnock, F. (2010). Do foreigners invest less in poorly governed firms? Review of Financial Studies, 23, 3245- 3285.
Li, D., Moshirian, F., Pham, P., & Zein, J. (2006). When financial institutions are large shareholders: The role of macro corporate governance environments. Journal of Finance, 61, 2975-3007.
Lipsey, R. E., & Sjöholm, F. (2005). The impact of inward FDI on host countries: Why such different answers? In T. H. Moran, E. M Graham, & M. Blömstrom (Eds.), Does foreign direct investment promote development? (pp. 23-43). Washington, DC: Institute for International Economics.
Pae, J. (2011). A synthesis of accrual quality and abnormal accrual models: An empirical implementation. Asia-Pacific Journal of Accounting & Economics, 18, 27–44.
Penman, S. H., & Zhang, X. J. (2002). Accounting conservatism, the quality of earnings, and stock returns. Accounting Review, 77, 237–264.
Ramalingegowda, S., & Yu, Y. (2012). Institutional investors and accounting xonservatism. Journal of Accounting and Economics, 53, 98-114.
Richardson, S. A., Sloan, R. G., Soliman, M. T., & Tuna, I. (2005). Accrual reliability, earnings persistence and stock prices. Journal of Accounting and Economics, 39, 437–485.
Rouf, A., & Al-Harun, A. (2011). Ownership structure and voluntary disclosure in annual reports of Bangladesh. Review of Economic and Business Studies, 4(1), 239-251.
Schipper, K. (1989). Commentary on earnings management. Accounting Horizons, 3, 91–102.
Shleifer, A., & Vishny, R. (1986). Large shareholders and corporate control. Journal of Political Economy, 94, 461-488.
Shuto, A., & Takada, O. (2010). Managerial ownership and accounting conservatism in Japan: A test of management entrenchment effect. Journal of Business Finance and Accounting, 37, 815-841.
Sloan, R. G. (1996). Do stock prices fully reflect information in accruals and cash flows about future earnings? Accounting Review, 71, 289–315.
Song, F. (2015). Ownership structure and accounting conservatism: A literature review. Modern Economy, 6, 478-483.
Stevens, J. (1992). Applied multivariate statistics for the social science (2nd ed.). New York: Harper and Row.
Watts, R. L., & Zimmerman, J. L. (1986). Positive accounting theory. London: Prentice-Hall.
Xu, J. G., & Lu, C. J. (2008). Accounting conservatism: A study of market-level and firm level-explanatory factors. China Journal of Accounting Research, 1(1), 11–29.
Yang, Y. J., Kweh, Q. L., & Lin, R. C. (2014). Earnings quality of Taiwanese group firms. Asia-Pacific Journal of Accounting & Economics, 21(2) 134-156. doi:10.1080/16081625.2013.871771
นักลงทุนต่างชาติร้อยละ 32.8 จะขยายการลงทุนในไทย. (2559, 11 สิงหาคม). ฐานเศรษฐกิจ. สืบค้นจาก https://www.thansettakij.com/content/84240
นิพัฒน์ โพธิ์วิจิตร, พิรุณา ไบโลวัส, และฐิติมา สิทธิพงษ์พานิช. (2555). ผลกระทบของโครงสร้างผู้ถือหุ้นที่มีต่อการบริหารกำไรของบริษัทจดทะเบียนในตลาดหลักทรัพย์แห่งประเทศไทย. วารสารวิชาชีพบัญชี, 8(21): 20-40.
ประภาพร ณ นรงค์. (2549). ความสัมพันธ์ระหว่างโครงสร้างผู้ถือหุ้นในบริษัทที่จดทะเบียนในตลาดหลักทรัพย์แห่งประเทศไทย กับความสามารถในการทำกำไรทางบัญชี (วิทยานิพนธ์ปริญญามหาบัณฑิต ไม่ได้ตีพิมพ์). จุฬาลงกรณ์มหาวิทยาลัย, กรุงเทพฯ.
สัจจวัฒน์ จันทร์หอม, และศิลปพร ศรีจั่นเพชร. (2555). คุณภาพกำไรของบริษัทครอบครัวไทย วารสารวิชาชีพบัญชี, 8(21),78-88.
Ahmed, A. S., & Duellman, S. (2007). Accounting conservatism and board of director characteristics: An empirical analysis. Journal of Accounting and Economics, 43(2–3), 411–437.
Al-Sraheen, D. O. (2014). The influence of corporate ownership structure and board members’ skills on the accounting conservatism: Evidence from non-financial listed firms in Amman stock exchange. International Journal of Accounting and Financial Reporting, 4: 177-200
Ali, U., Noor, M., Khurshid, M. K., & Mahmood, A. (2015). Impact of firm size on earnings management: A study of textile sector of Pakistan. European Journal of Business and Management, 7(28), 47-56. Retrieved from https://dx.doi.org/10.2139/ssrn.2698317
Alzoubi, E. S. S. (2016). Ownership structure and earnings management: Evidence from Jordan. International Journal of Accounting & Information Management, 24(2), 135-161. doi.org/10.1108/IJAIM-06-2015-0031
An, Y. (2015). Dose foreign ownership increase financial performance quality? Asian Academy of Management Journal, 20(2), 81-101.
Ang, J. B. (2009) Foreign direct investment and its impact on the Thai economy: The role of financial development. Journal of Economics and Finance, 33, 316–323.
Ball, R., & Shivakumar, L. (2005). Earnings quality in UK private firms: Comparative loss recognition timeliness. Journal of Accounting and Economics, 39, 83–128.
Barton, J. & Simko, P. (2002). The balance sheet as an earnings management constraint. The Accounting Review, 77, 1-27.
Basu, S. (1997). The conservatism principle and the asymmetric timeliness of earnings. Journal of Accounting and Economics, 24, 3–37.
Becht, M., Franks, J., Mayer, C., & Rossi, S. (2009). Returns to shareholder activism: Evidence from a clinical study of the Hermes UK Focus Fund. Review of Financial Studies, 22, 3093- 3129.
Beuselinck, C., Blanco, B., & García-Lara, J. M. (2017). The role of foreign shareholders in disciplining financial reporting. Journal of Business Finance & Accounting, 44(5-6), 558-592.
Chhaochharia, V., Niessen-Ruenzi, A., & Kumar, A. (2012). Local investors and corporate governance. Journal of Accounting and Economics, 54, 42-67.
Dechow, P. M., & Dichev, I. (2002). The quality of accruals and earnings: The role of accrual estimation errors. Accounting Review, 77, 35–59.
Dechow, P. M., Ge, W., & Schrand, C. (2010). Understanding earnings quality: A review of the proxies, their determinants and their consequences. Journal of Accounting and Economics, 50, 344–401.
Dechow, P. M., Kothari, S. P., & Watts, R. L. (1998). The relation between earnings and cash flows. Journal of Accounting and Economics, 25, 133–168.
Fan, J., & Wong, T. J. (2002). Corporate ownership structure and the informativeness of accounting earnings in East Asia. Journal of Accounting & Economics, 33, 401–425.
Fang, V., Maffett, M., & Zhang, B. (2013). The effect of institutional investment on financial reporting comparability. Working paper.
Giannetti, M., & Laeven, L. (2009). Pension reform, ownership structure, and corporate governance: Evidence from a natural experiment. Review of Financial Studies, 22, 4091-4127.
Gillan, S., & Starks, L. (2003). Corporate governance, corporate ownership, and the role of institutional investors: A global perspective. Journal of Applied Finance, 13, 4-22.
Givoly, D., Hayn, C. K., & Katz, S. P. (2010). Does public ownership of equity improve earnings quality? Accounting Review, 85, 195–225.
Guo, J., Huang, P., Zhang, Y., & Zhou, N. (2015). Foreign ownership and real earnings management: Evidence from Japan. Journal of International Accounting Research, 14(2), 185-213.
Hartzell, J., & Starks, L. (2003). Institutional investors and executive compensation. Journal of Finance, 58, 2351-2374.
Ho, J. A. (2009). Association between board characteristics and accounting conservatism: Empirical evidence from Malaysia (Unpublished doctoral dissertation). Auckland University of Technology.
Ji, X. D., Ahmed, K., & Lu, W. (2015). The impact of corporate governance and ownership structure reforms on earnings quality in China. International Journal of Accounting & Information Management, 23(2), 169-198.
LaFond, R., & Roychowdhury, S. (2008). Managerial ownership and accounting conservatism. Journal of Accounting Research, 46(1), 101-135.
LaFond, R., & Watts, R. (2008). The information role of conservatism. The Accounting Review, 83, 447-478.
Lel, U. (2013). The role of foreign institutional investors in restraining earnings management activities across countries. Working paper.
Leuz, C., Lins, K., & Warnock, F. (2010). Do foreigners invest less in poorly governed firms? Review of Financial Studies, 23, 3245- 3285.
Li, D., Moshirian, F., Pham, P., & Zein, J. (2006). When financial institutions are large shareholders: The role of macro corporate governance environments. Journal of Finance, 61, 2975-3007.
Lipsey, R. E., & Sjöholm, F. (2005). The impact of inward FDI on host countries: Why such different answers? In T. H. Moran, E. M Graham, & M. Blömstrom (Eds.), Does foreign direct investment promote development? (pp. 23-43). Washington, DC: Institute for International Economics.
Pae, J. (2011). A synthesis of accrual quality and abnormal accrual models: An empirical implementation. Asia-Pacific Journal of Accounting & Economics, 18, 27–44.
Penman, S. H., & Zhang, X. J. (2002). Accounting conservatism, the quality of earnings, and stock returns. Accounting Review, 77, 237–264.
Ramalingegowda, S., & Yu, Y. (2012). Institutional investors and accounting xonservatism. Journal of Accounting and Economics, 53, 98-114.
Richardson, S. A., Sloan, R. G., Soliman, M. T., & Tuna, I. (2005). Accrual reliability, earnings persistence and stock prices. Journal of Accounting and Economics, 39, 437–485.
Rouf, A., & Al-Harun, A. (2011). Ownership structure and voluntary disclosure in annual reports of Bangladesh. Review of Economic and Business Studies, 4(1), 239-251.
Schipper, K. (1989). Commentary on earnings management. Accounting Horizons, 3, 91–102.
Shleifer, A., & Vishny, R. (1986). Large shareholders and corporate control. Journal of Political Economy, 94, 461-488.
Shuto, A., & Takada, O. (2010). Managerial ownership and accounting conservatism in Japan: A test of management entrenchment effect. Journal of Business Finance and Accounting, 37, 815-841.
Sloan, R. G. (1996). Do stock prices fully reflect information in accruals and cash flows about future earnings? Accounting Review, 71, 289–315.
Song, F. (2015). Ownership structure and accounting conservatism: A literature review. Modern Economy, 6, 478-483.
Stevens, J. (1992). Applied multivariate statistics for the social science (2nd ed.). New York: Harper and Row.
Watts, R. L., & Zimmerman, J. L. (1986). Positive accounting theory. London: Prentice-Hall.
Xu, J. G., & Lu, C. J. (2008). Accounting conservatism: A study of market-level and firm level-explanatory factors. China Journal of Accounting Research, 1(1), 11–29.
Yang, Y. J., Kweh, Q. L., & Lin, R. C. (2014). Earnings quality of Taiwanese group firms. Asia-Pacific Journal of Accounting & Economics, 21(2) 134-156. doi:10.1080/16081625.2013.871771