Earnings management and leverage in Germany

Abstract

In this study I analyze the relationship between accrual-based as well as real earnings management and leverage using a sample of listed German companies in the period between 2010 and 2019. For both types of earnings management three different models are applied in line with existing research on other countries. The regressions to capture the level of earnings management are estimated cross-sectionally. I find a significant positive relationship between accrual-based earnings management and leverage, while results for real earnings management vary depending on the model applied. Furthermore, I find similar results for a sample of highly levered firms, however, with stronger magnitudes.

Date of Award	26 Jan 2021
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Fani Kalogirou (Supervisor)