ScholarWorks@숙명여자대학교

초록

This study empirically tested whether there is earnings management when the firm cross-lists its DR(depositary receipt) abroad. The earnings management was measured using the real activities manipulation as well as the discretionary accruals. The results are as follows. First, DR cross-listing firms significantly decrease their earnings by reducing the discretionary accruals. It is more likely when the firms have negative discretionary accruals. Second, in the context of earnings management through real activities manipulation, the decrease of earnings was not found without variation. The DR cross-listing displays negative significance not only in the abnormal cash flow from operations but also in the abnormal discretionary expenses. This implies that the cross-listing of DR abroad results in the increase of earnings by the decrease of cash flow from operations as well as the decrease of discretionary expenses. On the other hand, DR cross-listing displays negative significance in the abnormal production cost which implies the decrease of earnings management through real activities manipulation. In conclusion, DR cross-listing firms reduces discretionary accruals leading to the decreases of the earnings but this goes into reverse in part by the earnings management through real activities which has the direct impact on cash flow fo the firm.

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