Earnings Management Incentives, Accruals Constraints, and Cost Stickiness: Empirical Evidence from Egypt

Hassouna, Muhammad E.

Article Details

Earnings Management Incentives, Accruals Constraints, and Cost Stickiness: Empirical Evidence from Egypt

Authors:

Hassouna, Muhammad E.

Publisher:

جامعة الزقازيق - كلية التجارة

Journal:

مجلة البحوث التجارية 2020 Vol.42 Issue 4, pp.56-80

Document Type:

Article

Publication Date:

10/2020

Document Language:

English

Document ID (Org No.):

2000990430

Keywords:

Abstract:

 This study investigates the relationship between managerial incentives to earnings management and cost stickiness. I argue that when managers have incentives to earnings management, they tend to increase costs less for an increase, in sales and to aggressively cut resources for a decrease in sales and thus cost stickiness decreases. Three proxies are used for management incentives to earnings management; namely, management incentive to avoid loss, incentive to avoid earning decrease, and incentive to avoid loss and/ or earning decrease. A sample of 940 firm-year observations of non-financial firms listed in the Egyptian Stock Exchange from 2011 to 2017 is used. The results support my hypotheses and I find that when managers have incentive to manage earnings, costs exhibit an anti-sticky behavior. These results shed light on the role of motivations underlying managerial decisions in affecting firms’ cost behavior.

Article Details

Earnings Management Incentives, Accruals Constraints, and Cost Stickiness: Empirical Evidence from Egypt

Authors:

Hassouna, Muhammad E.

Publisher:

جامعة الزقازيق - كلية التجارة

Journal:

مجلة البحوث التجارية 2020 Vol.42 Issue 4, pp.56-80

Document Type:

Article

Publication Date:

10/2020

Document Language:

English

Document ID (Org No.):

2000990430

الشركات

إدارة الأرباح

قيود الاستحقاق

التكلفة الثابتة

سلوك التكلفة

الحوافز

مصر

Issues

Article Details

Authors: Hassouna, Muhammad E.

Publisher: جامعة الزقازيق - كلية التجارة

Journal: مجلة البحوث التجارية 2020 Vol.42 Issue 4, pp.56-80

Document Type: Article

Publication Date: 10/2020

Document Language: English

Document ID (Org No.): 2000990430

Issues

Authors:

Hassouna, Muhammad E.

Publisher:

جامعة الزقازيق - كلية التجارة

Journal:

مجلة البحوث التجارية 2020 Vol.42 Issue 4, pp.56-80

Document Type:

Article

Publication Date:

10/2020

Document Language:

English

Document ID (Org No.):

2000990430