Does the Presence of Female Executives Curb Earnings Management? Evidence from Korea

초록

We investigate the role of female executives in curbing earnings management behaviour in Korea, a country known for its strong male-dominant culture. In a sample of Korean firms from 2002 to 2010, we find that female presence in top management is negatively associated with discretionary accruals, suggesting that gender diversity in senior management deters opportunistic financial reporting even in a highly male-dominant corporate environment. Further, this association is primarily observed in firms with stronger (weaker) female (male) dominance. This finding is consistent with the idea that female executives can exert more influence on corporate decisions in a more female-friendly environment. These findings have implications for academics and practitioners seeking to understand the impact of the role of top executive gender diversity in corporate accounting practices. We provide evidence that gender diversity in senior management deters opportunistic financial reporting even in a highly male-dominant Korean corporate environment. Further, this association is primarily observed in firms with stronger female dominance. This finding suggests that female executives exert more influence on corporate decisions in a more female-friendly environment.

키워드