Open AccessAn Empirical Study on the Relationship Between Foreign Investors and Earnings Quality
Author(s) -
Yohan An
Publication year - 2019
Publication title -
research in world economy
Language(s) - English
Resource type - Journals
eISSN - 1923-399X
pISSN - 1923-3981
DOI - 10.5430/rwe.v10n3p99
Subject(s) - earnings quality , earnings , accrual , panel data , business , quality (philosophy) , relevance (law) , conservatism , foreign direct investment , value (mathematics) , earnings response coefficient , accounting , monetary economics , economics , macroeconomics , econometrics , philosophy , epistemology , machine learning , politics , political science , computer science , law
This study examines the impact of foreign investors on earnings quality in emerging capital market using Korean manufacturing firms’ panel data set, regarding competing for international investment and business opportunities during the period 2000 to 2012. This paper tests earnings quality using four proxies based on the International Financial Reporting Standards: 1) persistence, 2) value relevance, 3) conservatism, and 4) accruals quality. This research finds foreign investor is positively associated with only user needs earnings quality; persistence and value relevance. This result shows that the positive impact of foreign investor on earnings quality is evident but limited.