Earnings Quality and Corporate Life Cycle Before the Crisis. A Study of Transport Companies Across Europe

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F04130081%3A_____%2F22%3AN0000011" target="_blank" >RIV/04130081:_____/22:N0000011 - isvavai.cz</a>

Result on the web

<a href="https://www.amfiteatrueconomic.ro/ArticolEN.aspx?CodArticol=3142" target="_blank" >https://www.amfiteatrueconomic.ro/ArticolEN.aspx?CodArticol=3142</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.24818/EA/2022/61/782" target="_blank" >10.24818/EA/2022/61/782</a>

Result language

angličtina

Original language name

Earnings Quality and Corporate Life Cycle Before the Crisis. A Study of Transport Companies Across Europe

Original language description

Deteriorating macroeconomic conditions and plans to move to a green economy such as the Green Deal are putting pressure on both internal and external stakeholders to create a liquidity cushion in the event of unexpected expenditures. However, when analyzing reported earnings, which may constitute a source of internal financing, it is necessary to take into account the corporate life cycle, which changes the quality of reported earnings. The aim of the study is to identify and examine the impact of the corporate life cycle on the level of earnings quality in European transport companies in the pre-crisis years. A hierarchical linear mixed model was used to reveal these relationships, the sample included more than 30,000 companies covering the years 2011-2019 from 30 European countries. Discretionary accruals were used as quality proxy earnings, and the company’s life cycle was modeled by the Dickinson cash flow model. Transport companies in Europe in the pre-crisis period had lowquality reported earnings. These enterprises manipulated earnings in accordance with the U-shaped curve, where mature firms applied downward earnings management techniques on average. Very large companies that were listed in the pre-crisis period chose upward earnings management, while smaller and unlisted companies opportunistically reduced reported earnings. These results imply that, in the pre-crisis period, European transport companies opportunistically obtained short-term benefits according to management requirements by reporting accounting profits other than cash flow. However, during the crisis and post-crisis years, they reduced their internal financing resources and/or affected the chances of obtaining state aid and other subsidies approved according to the accounting outputs.

Czech name

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Czech description

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Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

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OECD FORD branch

50204 - Business and management

Project

—

Continuities

N - Vyzkumna aktivita podporovana z neverejnych zdroju

Publication year

2022

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Amfiteatru Economic

ISSN

1582-9146

e-ISSN

—

Volume of the periodical

24

Issue of the periodical within the volume

61

Country of publishing house

RO - ROMANIA

Number of pages

15

Pages from-to

782-796

UT code for WoS article

000855161200012

EID of the result in the Scopus database

2-s2.0-85135257211