Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129661
Authors: 
Hooghiemstra, Reggy
Hermes, Niels
Oxelheim, Lars
Randøy, Trond
Year of Publication: 
2015
Series/Report no.: 
IFN Working Paper 1096
Abstract: 
Prior literature shows that choices regarding board composition are associated with earnings management. We add to this literature by examining the effects of the presence of a foreign board member on earnings management. Using a sample of 3,249 firm-year observations representing 586 non-financial listed Nordic firms during 2001-2008, we find that the presence of a non-Nordic, foreign director is associated with significantly higher levels of earnings management. Moreover, we provide preliminary evidence that differences in accounting knowledge drive this effect. Our results suggest that it may not necessarily be beneficial to appoint a foreign director to the board.
Subjects: 
Earnings management
Board composition
Internationalization
Foreign board member
Accounting knowledge
JEL: 
G34
M16
M41
M52
Document Type: 
Working Paper

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