Publication Date


Document Type


Degree Name

Doctor of Philosophy in International Business Administration (Ph.D.-IB)

Committee Chair

Sears, Steve

Committee Member

Jha, Anand

Committee Member

Gruben, William

Committee Member

Shankar, Siddharth


These essays explore the events which prompt managers to managing a firm’s earnings. Using econometric investigative tools and US Firm data, I find that managing earnings is exacerbated by golden parachute provision to executives – namely the Chief Executive Officers, older executives, the firm’s prior cost of capital – specifically, the high cost of debt, and firms located farther from stakeholders monitoring – specifically, the regional offices of the Securities and Exchange Commission (SEC). In the first essay, three questions are posed. These are: (i) Does the prior cost of debt and equity impact the propensity for firms to manage earnings? (ii) What type of prior cost of capital affects managed earnings behavior? (iii) Does the location of firms amplify the prior cost of capital effects on managed earnings? To mitigate and aid in the restructuring of a firm’s cost of capital, better performance and improved financial statements contributes immensely. As such, when a firm’s prior cost of capital is high, the firm is more likely to manage its earnings to help attain favorable placements – in the equity market and to lower borrowing costs from the debt market. In the second essay, two questions were asked. These are: (i) Do firms with golden parachute provisions manage their earnings more? (ii) Does the CEO’s age play a major role on the propensity to which firms manage their earnings? Arguably, golden parachutes can serve as a soft-landing mechanism for most CEOs or serve as an impetus for managers to undertake riskier projects. The empirical evidence in essay two suggests that firms with a golden parachute provision are more likely to manage their earnings. Furthermore, I find that the age of the CEO enhances the proclivity for firms to manage earnings.