Title: Capital structure and earnings management: evidence from recent French corporate governance context

Authors: Sana Triki Damak; Salah Ben Hamad

Addresses: Institute of Higher Commercial Studies (IHEC), University of Sfax, Road Sidi Mansour Km 10 B.P 43-3061, Sfax, Tunisia ' Institute of Higher Commercial Studies (IHEC), University of Sfax, Road Sidi Mansour Km 10 B.P 43-3061, Sfax, Tunisia

Abstract: The aim of this research is to show how the capital structure policy is affected by earnings management and corporate governance characteristics. This study is performed on a sample of SBF 120 listed companies over the period 2009-2014. Raman and Shahrur's (2008) model is used for calculation of discretionary accruals. Using two fixed-effects models, we confirm the significant relationship between earnings management and capital structure. Also, we find significant relationships between capital structure and some board of directors' characteristics such as size, independence and CEO duality. Finally, we find significant influence of institutional participation and profitability on capital structure policy. These findings add new evidence to the existing literature about capital structure determinants and provide a confirmation of the significant effects of both earnings management and board of directors' characteristics on the company's debt level.

Keywords: earnings management; capital structure; board of directors' characteristics.

DOI: 10.1504/IJAAPE.2019.106405

International Journal of Accounting, Auditing and Performance Evaluation, 2019 Vol.15 No.4, pp.313 - 333

Received: 21 May 2018
Accepted: 29 Apr 2019

Published online: 30 Mar 2020 *

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