ABSTRACT
This article examines the impact of pay disparity within the top management team (TMT) on real earnings management. Using data from Chinese listed firms for the period 2007 to 2018, we find that pay disparity within TMT has a negative impact on real earnings management and this relationship further enhances firms’ value, which supports internal governance view. Moreover, the indirect effect is stronger when product market competition is high. Results hold for both accounting and market firm value measures.
Disclosure statement
No potential conflict of interest was reported by the authors.
Correction Statement
This article has been republished with minor changes. These changes do not impact the academic content of the article.
Notes
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