Contents
Chapter 1 Introduction 1
Chapter 2 Literature review 4
2.1 Executive compensation and earnings management 4
2.2 The establishment of hypotheses 6
2.2.1 The asymmetry due to the level of earnings management 7
2.2.2 The asymmetry due to the level of CEO cash compensation 8
Chapter 3 Data and sample selection 11
3.1 Sample selection 11
3.2 Accruals estimation 12
Chapter 4 Empirical Model and Methodology 14
4.1 Model specification 14
4.1.1 The non-threshold model 15
4.1.2 The single-threshold model 16
4.1.3 The double-threshold model 17
4.2 Estimation procedure 18
4.3 Summary statistics 19
Chapter 5 Empirical results 21
5.1 The non-threshold panel data model 21
5.2 Panel data model with a single threshold variable and two regimes 22
5.3 Panel data model with double threshold variables and four regimes 25
Chapter 6 Conclusions 28
References 30
List of Tables
Table 1 Variable definitions 33
Table 2 Basic statistics of variables 34
Table 3 Correlations among variables 34
Table 4 Estimates of the non-threshold model 35
Table 5 Estimates of the single threshold model applying discretionary accruals as the threshold variable 36
Table 6 Estimates of the single threshold model applying cash compensation as the threshold variable 37
Table 7 Estimates of the double threshold model with two threshold variables 38
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