TY  - JOUR
AB  - Purpose The purpose of this study is to examine whether institutional investors monitoring attenuate (exacerbate) weaker earnings persistence in politically connected firms (PCFs). In addition, it investigates whether earnings persistence do vary according to different types of political connections.Design/methodology/approach This study employs earnings persistence as measure of earnings quality and ordinary least squares (OLS) model to examine: (1) the moderating effect of institutional investors’ ownership on the association between earnings persistence and PCFs and (2) the association between different types of political connections and earnings persistence.Findings This study finds that institutional investors' ownership attenuates weaker earnings quality in PCFs, indicating effective monitoring. However, stronger earnings persistence is associated with PCFs with longer political ties, audited by big four audit firm and with higher CEO power.Originality/value This study reveals the lower earnings persistence in PCFs can be attenuated by institutional investors monitoring. However, findings also suggest that earnings persistence in PCFs is affected by duration of political ties, big four audit firm and CEO power. This suggests that PCFs should not be viewed as a homogeneous group of firms.
VL  - 28
IS  - 3
SN  - 1321-7348
DO  - 10.1108/ARA-05-2019-0112
UR  - https://doi.org/10.1108/ARA-05-2019-0112
AU  - Tee Chwee Ming
AU  - Rasiah Puspavathy
PY  - 2020
Y1  - 2020/01/01
TI  - Earnings persistence, institutional investors monitoring and types of political connections
T2  - Asian Review of Accounting
PB  - Emerald Publishing Limited
SP  - 309
EP  - 327
Y2  - 2024/09/22
ER  -