EARNINGS MANAGEMENT AND FINANCIAL RESTRICTION IMPACT ON THE CAPITAL STRUCTURE OF BRAZILIAN COMPANIES

Authors

Keywords:

Earnings Management, Financial Constraint, Capital Structure

Abstract

This paper aims to investigate the impact of earnings management and financial constraints on the indebtedness of Brazilian companies. For this, we collected financial data of 277 publicly traded Brazilian companies from 2011 to 2018, making it a sample with 2207 observations. Based on the non-parametric Mann-Whitney test, we analyzed the median equality hypothesis of the grouping of financial indicators, according to signs of earnings management or financial constraint. Through multivariate panel data regression estimated by Fixed Effects with Robust Clustered Errors, our main results are: (1) the existence of empirical evidence that the financial constraint positively affects indebtedness; (2) there was no statistically significant relationship between earnings management and indebtedness; and (3) the simultaneous presence of financial constraint and evidence of earnings smoothing is negatively associated with the indebtedness of Brazilian companies. The results of this study contribute to the debate about the determinants of indebtedness of publicly traded Brazilian companies.

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Author Biographies

Aline Roberta Camargo, Universidade Federal de São Carlos (UFSCar)

Bacharel em Administração; Departamento de Administração, Centro de Ciências em Gestão e Tecnologia da Universidade Federal de São Carlos (UFSCar).

Flávio Leonel Carvalho, Universidade Federal de São Carlos (UFSCar)

Bacharel em Ciências Contábeis, Mestre em Controladoria e Contabilidade e Doutor em Engenharia de Produção pela Universidade de São Paulo; Professor Associado do Departamento de Administração do Centro de Ciências em Gestão e Tecnologias da Universidade Federal de São Carlos (UFSCar).

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Published

2022-09-27

How to Cite

Camargo, A. R., & Carvalho, F. L. (2022). EARNINGS MANAGEMENT AND FINANCIAL RESTRICTION IMPACT ON THE CAPITAL STRUCTURE OF BRAZILIAN COMPANIES. Revista Universo Contábil, 17(2). Retrieved from https://ojsrevista.furb.br/ojs/index.php/universocontabil/article/view/9996

Issue

Vol. 17 No. 2 (2021)

Section

National Section

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