ABSTRACT
This article examines the effect of the institutional investment horizon on firms’ earnings management and the moderating effect of state ownership. Using a sample of Chinese listed companies from 2010 to 2018, we find that a shorter institutional horizon leads to significantly more earnings management. Focusing on the interaction between the institutional horizon and state ownership, we find that the negative effect of short-term institutional shareholdings is weaker in state-owned firms. This article contributes to the existing literature by addressing the relationship between institutional investment horizon, state ownership, and earnings management in emerging capital markets.
Disclosure statement
No potential conflict of interest was reported by the author(s).