Family identification and earnings management in listed firms

Figures & data

Table 1. Sample.

Steps				Firm-year observations	Firms
Panel A. Sample selection.
All firms listed on SIX between 2006 and 2018 (primary quote, active or dead, incorporated in Switzerland)				8,606	662
Minus firms for which Datastream reports an error				−3,250
Minus financials, duplicates, firms with an ISIN not starting with CH, and firms with missing data on Datastream				−3,679
Minus firms with missing data in annual reports				−133
Final sample				1,544	125
ICB industry name	All non-FF	All FF	Eponymous FF	Non-eponymous FF	Total
Panel B. Firm-year observations by firm type and industry.
Basic materials	73	52	0	52	125
Consumer goods	100	113	0	113	213
Consumer services	97	32	0	32	129
Health care	167	60	13	47	227
Industrials	348	292	83	209	640
Technology	94	42	12	30	136
Telecommunication	13	0	0	0	13
Utilities	61	0	0	0	61
Total	953	591	108	483	1,544

Table 2. Descriptive statistics.

	Mean	Std. dev.	Q1	Median	Q3
Panel A. Full sample (N = 1,544).
ABSABNACC	0.081	0.076	0.029	0.059	0.106
FAM	0.380	0.486	0.000	0.000	1.000
FAM_EPONYM	0.069	0.254	0.000	0.000	0.000
FAM_INVOLVEMENT	0.205	0.404	0.000	0.000	0.000
AC_INDEP	0.647	0.478	0.000	1.000	1.000
IFRS	0.626	0.484	0.000	1.000	1.000
DLOSS	0.168	0.374	0.000	0.000	0.000
MTB	2.734	3.030	1.073	1.835	3.231
OWN	0.389	0.257	0.169	0.360	0.591
LEVERAGE	0.171	0.155	0.034	0.141	0.271
SIZE	13.566	1.846	12.348	13.432	14.691
BIG4	0.884	0.321	1.000	1.000	1.000
AGE	0.666	0.285	0.5000	0.750	1.000
	Family firms		Non-family firms
	Mean	Median	Mean	Median
Panel B. Family firms (N = 591) and non-family firms (N = 953).
ABSABNACC	0.065	0.050	0.091***	0.066***
FAM_EPONYM	0.183	0.000	0.000***	0.000***
FAM_INVOLVEMENT	0.540	1.000	0.000***	0.000***
AC_INDEP	0.614	1.000	0.667**	1.000**
IFRS	0.560	1.000	0.666***	1.000***
DLOSS	0.124	0.000	0.195***	0.000***
MTB	2.653	1.781	2.783	1.890
OWN	0.478	0.516	0.334***	0.294***
LEVERAGE	0.170	0.126	0.171	0.154
SIZE	13.458	13.053	13.632*	13.689**
BIG4	0.863	1.000	0.896**	1.000**
AGE	0.689	0.750	0.636***	0.500***
	Eponymous FF		Other FF
	Mean	Median	Mean	Median
Panel C. Eponymous family firms (N = 108) and other family firms (N = 483).
ABSABNACC	0.065	0.054	0.065	0.049
FAM_INVOLVEMENT	0.815	1.000	0.478***	0.000***
AC_INDEP	0.639	1.000	0.609	1.000
IFRS	0.500	0.500	0.573	1.000
DLOSS	0.056	0.000	0.139**	0.000**
MTB	2.865	2.061	2.685	1.829*
OWN	0.459	0.487	0.482	0.517
LEVERAGE	0.176	0.116	0.169	0.127
SIZE	13.543	13.228	13.439	12.963
BIG4	0.861	1.000	0.863	1.000
AGE	0.826	1.000	0.658***	0.750***

Notes: This table presents descriptive statistics for dependent, independent and control variables. All variables are defined in the Appendix. In Panels B and C, ***, ** and * indicate statistical significance of a t-test of difference in means, or Mann-Whitney test of difference in medians (FF versus non-FF in Panel B and identity FF versus other FF in Panel C) at the 1%, 5% and 10% levels, respectively.

Table 3. Correlation matrix.

	1	2	3	4	5	6
1: ABSABNACC	1
2: FAM	−0.1365*	1
3: FAM_EPONYM	−0.059	0.3529*	1
4: FAM_OTHER	−0.0931*	0.5436*	−0.1144*	1
5: FAM_INVOLVEMENT	−0.106*	0.649*	0.4091*	0.2018*	1
6: AC_INDEP	−0.1665*	−0.0450	−0.0030	0.0840*	−0.0990*	1
7: IFRS	−0.1041*	−0.0871*	−0.0624*	−0.0350	−0.0677*	0.3110*
8: DLOSS	0.1838*	−0.0870*	−0.0781*	−0.0300	−0.0210	−0.0340
9: MTB	0.0612	−0.023	0.0154	−0.0160	0.0060	0.1030*
10: OWN	−0.0270	0.2456*	0.0702*	0.0719*	0.2045*	−0.1029*
11: LEVERAGE	0.0641	0.0212	0.0196	0.0137	0.0083	0.0389
12: SIZE	−0.2459*	−0.0300	−0.0030	−0.0480	−0.0955*	0.2588*
13: BIG4	−0.1487*	−0.0480	0.0005	−0.0160	−0.0310	0.0753*
14: AGE	−0.0653*	0.0939*	0.1563*	−0.0025	−0.0416	0.0304
Table 3. Correlation matrix (continued).
	7	8	9	10	11	12	13	14
7: IFRS	1
8: DLOSS	0.0879*	1
9: MTB	0.0761*	0.0407	1
10: OWN	−0.0714*	0.0504	−0.094*	1
11: LEVERAGE	−0.0200	0.1277*	0.0962*	−0.1043*	1
12: SIZE	0.2162*	−0.2866*	−0.0300	−0.2168*	0.1291*	1
13: BIG4	0.1606*	−0.0619*	0.0676*	−0.1697*	−0.0715*	0.1692*	1
14: AGE	−0.1104*	−0.1533*	−0.2028*	0.0133	−0.0627*	0.1296*	−0.0599	1

Notes: This table presents Pearson correlation coefficients for dependent, independent and control variables. All variables are defined in the Appendix.

* indicates statistical significance at the 1% level.

Table 4. Influence of eponymous FF on accrual-based earnings management.

	Absolute abnormal accruals (ABSABNACC)
	OLS model			Entropy balancing
	FF	Eponymous	Non-eponymous	FF	Eponymous	Non-eponymous
		FF	FF		FF	FF
	versus non-FF			versus non-FF
	1	2	3	4	5	6
FAM	−0.02**			−0.01**
	(−2.10)			(−2.44)
FAM_EPONYM		−0.04***			−0.04***
		(−2.65)			(−2.83)
FAM_OTHER			−0.01			−0.01
			(−1.42)			(−1.18)
FAM_INVOLVEMENT	−0.00	0.02	−0.01	0.00	0.03**	−0.00
	(−0.50)	(1.41)	(−1.15)	(0.13)	(2.03)	(−0.61)
AC_INDEP	−0.01	−0.02***	−0.01	0.00	−0.00	0.00
	(−1.57)	(−3.04)	(−1.53)	(0.44)	(−0.03)	(0.24)
IFRS	−0.01	−0.01	−0.01*	−0.01*	−0.01	−0.01*
	(−0.96)	(−1.29)	(−1.72)	(−1.79)	(−1.34)	(−1.86)
DLOSS	0.02***	0.02***	0.02**	0.02**	0.04***	0.02**
	(3.38)	(2.94)	(2.47)	(2.40)	(2.86)	(2.00)
MTB	0.00	0.00*	0.00	0.00	0.00	−0.00
	(1.48)	(1.92)	(0.93)	(0.11)	(0.74)	(−0.63)
OWN	−0.01	0.02	−0.02*	−0.02**	0.02	−0.03***
	(−0.59)	(1.07)	(−1.90)	(−2.27)	(1.02)	(−3.77)
LEVERAGE	0.00	0.00	0.01	0.03	−0.04*	0.04
	(0.12)	(0.15)	(0.25)	(1.30)	(−1.79)	(1.51)
SIZE	−0.00	−0.00	−0.00**	−0.00	−0.00	−0.00*
	(−1.05)	(−0.41)	(−2.43)	(−0.85)	(−0.33)	(−1.72)
BIG4	−0.02**	−0.01	−0.01	−0.01*	−0.04***	−0.01
	(−2.42)	(−1.30)	(−1.55)	(−1.95)	(−3.38)	(−0.78)
AGE	−0.01	−0.01	−0.02	0.01	0.05***	0.01
	(−0.84)	(−0.72)	(−1.44)	(1.01)	(2.91)	(0.76)
Constant	0.07*	0.03	0.16***	0.06**	0.04	0.10***
	(1.87)	(0.62)	(5.84)	(2.03)	(0.58)	(3.48)
Year and industry FE	Incl.	Incl.	Incl.	Incl.	Incl.	Incl.
First-step regressors	Incl.	Incl.	Incl.	Incl.	Incl.	Incl.
Observations	1,544	1,061	1,436	1,544	1,061	1,436
Adj. R-squared	0.29	0.33	0.29	0.29	0.33	0.29
F-statistic	23.57***	28.11***	10.19***	23.57***	28.11***	10.19***

Notes: This table reports regression results (using both OLS and entropy balancing models) on the association between FF and earnings management and is based on Equation (2(2) $\mathrm{A}\mathrm{B}\mathrm{S}\mathrm{A}\mathrm{B}\mathrm{N}\mathrm{A}\mathrm{C}{\mathrm{C}}_{\mathrm{i}\mathrm{t}}={\text{β}}_0+{\text{β}}_1\mathrm{F}\mathrm{A}\mathrm{M}\mathrm{V}\mathrm{A}{\mathrm{R}}_{\mathrm{i}\mathrm{t}}+\mathrm{C}\mathrm{O}\mathrm{N}\mathrm{T}\mathrm{R}\mathrm{O}\mathrm{L}{\mathrm{S}}_{\mathrm{i}\mathrm{t}}+\mathrm{I}\mathrm{n}\mathrm{d}\mathrm{u}\mathrm{s}\mathrm{t}\mathrm{r}\mathrm{y}/\mathrm{y}\mathrm{e}\mathrm{a}\mathrm{r}\mathrm{F}\mathrm{E}+{ϵ}_{\mathrm{i}\mathrm{t}}$(2) ). In columns 1 and 4, we compare all FF versus a control group of non-FF. In columns 2 and 5, all eponymous FF are compared to the non-FF control group. In columns 3 and 6, all FF except eponymous FF (FAM_OTHER) are compared to the non-FF control group. All variables are defined in the Appendix. Standard errors are clustered at the firm level and are corrected for heteroscedasticity. t-statistics are reported in parentheses. ***, ** and * indicate statistical significance at the 1%, 5% and 10% levels, respectively.

Table 5. IFRS turn aways by year.

Year	Number of switches from IFRS to Swiss GAAP		Percentage of FF among switching firms
	All firms	FF
2008	1	0	0%
2009	6	5	83%
2010	7	6	86%
2011	4	2	50%
2012	3	3	100%
2013	6	2	33%
2014	4	0	0%
2015	3	0	0%
2016	2	1	50%
2017	5	1	20%
2018	3	2	67%
Total	44	22	50%

Notes: This table reports the distribution of voluntary switches from IFRS to Swiss GAAP by year over the 2008–2018 period.

Table 6. Specific settings influencing earnings management in FF – IFRS turn away.

	Absolute abnormal accruals (ABSABNACC) {−1; + 2}
	First stage	Second stage
	The determinants of the switch	Switching FF or switching non-FF versus non-switching firms	Switching eponymous FF or switching non-FF versus non-switching firms	Switching other FF or switching non-FF versus non-switching firms
	1	2	3	4
POST1		−0.02	−0.03*	−0.02
		(−1.25)	(−1.71)	(−1.26)
POST2		0.02	0.01	0.02
		(0.56)	(0.32)	(0.56)
POST3		0.02	0.01	0.03
		(1.27)	(0.72)	(1.27)
POST1*FAM		0.03
		(1.51)
POST2*FAM		−0.02
		(−0.65)
POST3*FAM		−0.01
		(−0.47)
POST1*FAM_EPONYM			0.11**
			(2.13)
POST2*FAM_EPONYM			−0.04
			(−0.76)
POST3*FAM_EPONYM			0.05
			(1.44)
POST1*FAM_OTHER				0.02
				(0.93)
POST2*FAM_OTHER				−0.02
				(−0.58)
POST3*FAM_OTHER				−0.03
				(−0.87)
FAM	0.38***
	(4.80)
MTB	−0.05***
	(−3.74)
AC_INDEP	0.03	−0.00	−0.00	−0.01
	(0.38)	(−0.54)	(−0.58)	(−0.93)
DLOSS	−0.29***	0.01	−0.00	0.01
	(−2.85)	(0.52)	(−0.06)	(0.45)
OWN	−0.04	−0.02*	−0.04*	−0.03*
	(−0.22)	(−1.72)	(−1.74)	(−1.86)
LEVERAGE	0.23	0.06	0.08	0.05
	(1.00)	(1.47)	(1.52)	(1.34)
SIZE	−0.29***	−0.04	−0.07***	−0.04
	(−11.65)	(−1.34)	(−2.96)	(−1.29)
BIG4	−0.16	−0.00	−0.00	−0.00
	(−1.44)	(−0.30)	(−0.00)	(−0.29)
SALES_GROWTH	0.00	0.00*	0.00*	0.00*
	(0.89)	(1.86)	(1.75)	(1.67)
IMR		0.02	0.05	0.02
		(0.42)	(0.98)	(0.43)
Constant	4.03***	0.60	1.00***	0.58
	(8.28)	(1.59)	(3.36)	(1.52)
Fixed effects	Year	Firm and year	Firm and year	Firm and year
First-step regressors	No	Incl.	Incl.	Incl.
Observations	1,720	1,123	791	1,047
Pseudo/Adj. R-squared	0.24	0.16	0.25	0.16
LR Chi-squared/F-statistic	440.2***	2.2***	31.4***	32.6***

Notes: This table reports the results of a Heckman (1979) two-stage model (probit in column 1 and OLS in columns 2–4) estimating the association between FF and earnings management around the IFRS turn away and is based on Equation (3(3) $+{\text{β}}_7\mathrm{F}\mathrm{A}\mathrm{M}\mathrm{V}\mathrm{A}{\mathrm{R}}_{\mathrm{i}\mathrm{t}}\ast \mathrm{P}\mathrm{O}\mathrm{S}\mathrm{T}{3}_{\mathrm{i}\mathrm{t}}+\mathrm{C}\mathrm{O}\mathrm{N}\mathrm{T}\mathrm{R}\mathrm{O}\mathrm{L}{\mathrm{S}}_{\mathrm{i}\mathrm{t}}+\mathrm{F}\mathrm{i}\mathrm{r}\mathrm{m}/\mathrm{y}\mathrm{e}\mathrm{a}\mathrm{r}\mathrm{F}\mathrm{E}+{ϵ}_{\mathrm{i}\mathrm{t}}$(3) ). IMR is the inverse Mills ratio calculated in the first stage. All variables are defined in the Appendix. Standard errors are clustered at the firm level and are corrected for heteroscedasticity. z-statistics in column 1 and t-statistics in columns 2–4 are reported in parentheses. ***, ** and * indicate statistical significance at the 1%, 5% and 10% levels, respectively.

Table 7. Specific settings influencing earnings management in FF – Family involvement.

		Absolute abnormal accruals (ABSABNACC)
		OLS model			Entropy balancing
		FF	Eponymous FF	Non-eponymous FF	FF	Eponymous FF	Non-eponymous FF
		versus non-FF			versus non-FF
		1	2	3	4	5	6
FAM_C	${\text{β}}_1$	−0.04***			−0.04***
		(−3.25)			(−4.29)
FAM_EPONYM_C	${\gamma }_1$		−0.07***			−0.07***
			(−3.14)			(−3.11)
FAM_OTHER_C	${\delta }_1$			−0.04***			−0.03***
				(−2.80)			(−3.52)
FAM_C*FAM_INVOLVEMENT	${\text{β}}_2$	0.12***			0.14***
		(3.16)			(5.52)
FAM_EPONYM_C*FAM_INVOLVEMENT	${\gamma }_2$		0.36***			0.28***
			(4.65)			(3.55)
FAM_OTHER_C*FAM_INVOLVEMENT	${\delta }_2$			0.09**			0.10***
				(2.27)			(3.77)
FAM_INVOLVEMENT	${\theta }_1$	−0.06***	−0.18***	−0.05**	−0.07***	−0.13***	−0.06***
		(−3.23)	(−4.14)	(−2.49)	(−5.24)	(−3.13)	(−3.93)
Control variables		Incl.	Incl.	Incl.	Incl.	Incl.	Incl.
Year and industry FE		Incl.	Incl.	Incl.	Incl.	Incl.	Incl.
First-step regressors		Incl.	Incl.	Incl.	Incl.	Incl.	Incl.
Observations		1,544	1,061	1,436	1,544	1,061	1,436
Adj. R-squared		0.3	0.34	0.31	0.24	0.3	0.25
F-statistic		23.16***	30.47***	22.86***	10.10***	9.93***	9.44***
Test on linear combinations of coefficients:
${\text{β}}_1+{\text{β}}_2+{\theta }_1=0$
		0.013			0.027**
		(0.68)			(2.25)
${\gamma }_1+{\gamma }_2+{\theta }_1=0$
			0.105***			0.077***
			(2.94)			(2.16)
${\delta }_1+{\delta }_2+{\theta }_1=0$
				−0.003			0.013
				(−0.13)			(0.96)

Notes: This table reports OLS and entropy balancing estimation results on the association between FF and earnings management and is based on Equation (4(4) $+\mathrm{C}\mathrm{O}\mathrm{N}\mathrm{T}\mathrm{R}\mathrm{O}\mathrm{L}{\mathrm{S}}_{\mathrm{i}\mathrm{t}}+\mathrm{I}\mathrm{n}\mathrm{d}\mathrm{u}\mathrm{s}\mathrm{t}\mathrm{r}\mathrm{y}/\mathrm{y}\mathrm{e}\mathrm{a}\mathrm{r}\mathrm{F}\mathrm{E}+{ϵ}_{\mathrm{i}\mathrm{t}}$(4) ). In columns 1 and 4, we compare all FF versus a control group of non-FF. In columns 2 and 5, all eponymous FF are compared to the non-FF control group. In columns 3 and 6, all non-eponymous FF are compared to the non-FF control group. Control variables include AC_INDEP, IFRS, DLOSS, MTB, OWN, LEVERAGE, SIZE, BIG4, and AGE. All variables are defined in the Appendix. Standard errors are clustered at the firm level and are corrected for heteroscedasticity. t-statistics are reported in parentheses. *** and ** indicate statistical significance at the 1% and 5% levels, respectively.

Table 8. Influence of eponymous FF on total accruals and signed abnormal accruals.

	OLS model
	Total accruals (TOTACC)			Signed abnormal accruals (ABNACC)
	FF	Eponymous	Non-eponymous	FF	Eponymous	Non-eponymous
		FF	FF		FF	FF
	versus non-FF			versus non-FF
	1	2	3	4	5	6
FAM	−0.00			−0.00
	(−0.38)			(−0.63)
FAM_EPONYM		0.01			0.00
		(0.68)			(0.32)
FAM_OTHER			−0.01			−0.00
			(−1.35)			(−0.41)
FAM_INVOLVEMENT	0.01*	0.00	0.01	0.00	0.00	0.00
	(1.84)	(0.49)	(1.46)	(0.53)	(0.20)	(0.31)
AC_INDEP	0.00	−0.00	−0.00	−0.02**	−0.03**	−0.02*
	(0.19)	(−0.02)	(−0.59)	(−2.03)	(−2.10)	(−1.82)
IFRS	0.00	−0.00	0.00	0.01	0.01	0.00
	(0.33)	(−0.04)	(0.95)	(0.93)	(1.25)	(0.58)
DLOSS	−0.07***	−0.07***	−0.06***	−0.05***	−0.06***	−0.05***
	(−8.68)	(−7.50)	(−7.87)	(−5.36)	(−4.69)	(−5.27)
MTB	−0.00	−0.00	−0.00	0.00	0.00	0.00
	(−0.54)	(−0.33)	(−0.70)	(0.24)	(0.21)	(0.02)
OWN	−0.00	−0.00	0.01	−0.00	−0.00	−0.01
	(−0.12)	(−0.12)	(1.19)	(−0.01)	(−0.05)	(−0.88)
LEVERAGE	0.00	−0.00	0.00	0.02	0.00	0.01
	(0.34)	(−0.19)	(0.07)	(0.92)	(0.07)	(0.53)
SIZE	−0.00***	−0.00***	−0.00**	−0.02***	−0.02***	−0.02***
	(−3.39)	(−3.04)	(−2.29)	(−4.98)	(−4.80)	(−5.90)
BIG4	0.01	0.00	0.01	−0.00	0.00	−0.00
	(1.45)	(0.36)	(1.47)	(−0.08)	(0.08)	(−0.19)
AGE	−0.01	−0.01	0.01	−0.01	−0.02	−0.02*
	(−1.03)	(−1.13)	(0.89)	(−1.31)	(−1.50)	(−1.95)
Constant	0.08***	0.09***	0.00	0.13**	0.18***	0.19***
	(2.98)	(2.63)	(0.04)	(2.40)	(2.68)	(4.48)
Year and industry FE	Incl.	Incl.	Incl.	Incl.	Incl.	Incl.
First-step regressors	Incl.	Incl.	Incl.	Incl.	Incl.	Incl.
Observations	1,544	1,061	1,436	1,544	1,061	1,436
R-squared	0.23	0.25	0.22	0.42	0.40	0.42
F-statistic	103.6***	97.6***	32.9***	21.3***	19.5***	20.4***

Notes: This table reports regression results (using OLS estimations) on the association between FF and earnings management and is based on Equation (2(2) $\mathrm{A}\mathrm{B}\mathrm{S}\mathrm{A}\mathrm{B}\mathrm{N}\mathrm{A}\mathrm{C}{\mathrm{C}}_{\mathrm{i}\mathrm{t}}={\text{β}}_0+{\text{β}}_1\mathrm{F}\mathrm{A}\mathrm{M}\mathrm{V}\mathrm{A}{\mathrm{R}}_{\mathrm{i}\mathrm{t}}+\mathrm{C}\mathrm{O}\mathrm{N}\mathrm{T}\mathrm{R}\mathrm{O}\mathrm{L}{\mathrm{S}}_{\mathrm{i}\mathrm{t}}+\mathrm{I}\mathrm{n}\mathrm{d}\mathrm{u}\mathrm{s}\mathrm{t}\mathrm{r}\mathrm{y}/\mathrm{y}\mathrm{e}\mathrm{a}\mathrm{r}\mathrm{F}\mathrm{E}+{ϵ}_{\mathrm{i}\mathrm{t}}$(2) ). In columns 1 and 4, we compare all FF versus a control group of non-FF. In columns 2 and 5, all eponymous FF are compared to the non-FF control group. In column 3 and 6, all FF except eponymous FF (FAM_OTHER) are compared to the non-FF control group. All variables are defined in the Appendix. Standard errors are clustered at the firm level and are corrected for heteroscedasticity. t-statistics are reported in parentheses. ***, ** and * indicate statistical significance at the 1%, 5% and 10% levels, respectively.

Table A1. Definition and sources of variables.

Variable	Definition	Source
ABSABNACC	The absolute value of abnormal (discretionary) accruals following Francis et al. (2013).	Datastream
TOTACC	Total accruals calculated following Francis et al. (2013).	Datastream
ABNACC	Signed value of abnormal accruals following Francis et al. (2013).	Datastream
FAM	Dummy variable equal to 1 if the family owns 20% or more of voting rights, and 0 otherwise.	Annual reports
FAM_EPONYM	Dummy variable equal to 1 if the FF name includes the family name, and 0 otherwise.	Annual reports
FAM_OTHER	Dummy variable equal to 1 if the FF name does not include the family name, and 0 otherwise.	Annual reports
FAM_INVOLVEMENT	Dummy variable equal to 1 if the chairperson of the board of directors is a member of the owning family and/or if the CEO is a member of the owning family, and 0 otherwise.	Annual reports
FAM_C	Percentage of voting rights owned by the family for FF.	Annual reports
FAM_EPONYM_C	Percentage of voting rights owned by the family for eponymous FF.	Annual reports
FAM_OTHER_C	Percentage of voting rights owned by the family for other FF.	Annual reports
AC_INDEP	Dummy variable equal to 1 if the audit committee is only composed of independent members, and 0 otherwise.	Annual reports
SIZE	Natural logarithm of total assets.	Datastream
LEVERAGE	Debt-to-total assets ratio.	Datastream
MTB	Market-to-book ratio.	Datastream
DLOSS	Dummy variable taking the value of 1 if the firm is incurring a loss, and 0 otherwise.	Datastream
IFRS	Dummy variable taking the value of 1 if the firm applies IFRS, and 0 otherwise.	Annual reports
OWN	Percentage of closely held shares.	Datastream
BIG4	Dummy variable equal to 1 if the firm mandates a Big 4 firm as external auditor, and 0 otherwise.	Annual reports
AGE	Age of the firm calculated as the current year minus the incorporation year, ranked into quartiles.	Annual reports
SALES_GROWTH	Growth rate of total revenue.	Datastream
POST1	Dummy variable equal to 1 if the firm-year observation is the year of a switch from IFRS to Swiss GAAP for a given firm, and 0 otherwise.	Annual reports / corporate websites / Swiss press
POST2	Dummy variable equal to 1 if the firm-year observation is one year after a switch from IFRS to Swiss GAAP for a given firm, and 0 otherwise.	Annual reports / corporate websites / Swiss press
POST3	Dummy variable equal to 1 if the firm-year observation is two years after a switch from IFRS to Swiss GAAP for a given firm, and 0 otherwise.	Annual reports / corporate websites / Swiss press

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