Effect Of Earning Managements On Firm Performance And Moderating Role Of Gender Diversity: Evidence From Bric
DOI:
https://doi.org/10.56220/uwjms.v9i2.285Keywords:
Earnings Management, Gender Diversity, Firm Performance, BRICSAbstract
Purpose: This study aims to investigate how earnings management and gender diversity affect the firm performance of companies listed in BRIC. Additionally, it examines how board gender diversity moderates the association between accrual earnings management and firm performance.
Design and Methodology: The sample data were collected from 712 non-financial companies from the BRIC nations from 2017 to 2022. To investigate how firm performance is affected by earnings management, we have used the Generalized Method of Momemnt(GMM) regression technique because this technique is best suited to address the endogeneity problem in the data.
Findings: The result shows a significantly positive effect of earnings management on return on assets and a non-significant negative effect on Tobin's Q. A significant factor in forming this relationship is the gender diversity of the board. Gender-diverse boards in private companies provide greater governance and stronger supervision by lessening the effect of AEM on ROA and TQ. Gender diversity, on the other hand, boosts the beneficial impact of AEM on TQ in state-owned businesses, which could be a result of political influence or symbolic governance. Overall, the study shows that strong governance practices work better in private companies than in state-owned enterprises and that the success of board diversity is dependent on the ownership structure. According to this research, putting more women on corporate boards, particularly in private companies, can enhance financial openness and lessen earnings manipulation. In the BRIC nations, gender-diverse boards are mostly symbolic in state-owned businesses but play a significant governance role in private companies.
Implications: The findings provided useful insight for policymakers that, in order to improve corporate governance, deter unethical financial activities, and promote sustainable growth in emerging economies, specific gender diversity policies are required. This study adds to the limited body of research on firm performance in varied ownership environments, earnings management, and gender diversity.
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