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Intrinsic Benchmark Beating
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DOI：10.1111/jbfa.70054.png)
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Abstract
En 中文
We examine the role of intrinsic motivations-psychologically based, non-economic factors-in earnings benchmark beating by focusing on owner-managed firms that are largely free from external pressures from shareholders, analysts, and the media. We observe benchmark beating as instances in which owner-managers decrease their salaries to transform a loss into a profit. Two key results emerge. First, managers' earnings benchmark beating correlates with their private, non-economic benchmark beating, such as earning more than their spouses and marrying near base-ten-year ages. Second, even when accounting for various extrinsic motivations, such as reporting pressures from debt-holders, employees, and suppliers, we find that benchmark beating remains highly prevalent when these motivations are negligible. Overall, our results suggest that reference-dependent preferences from psychology literature complement economic arguments in explaining earnings benchmark beating.
Keywords:
Benchmark beating
earnings management
owner-managed firms
reference-dependence
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2.4
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