Abstract
This study examines the methods of the differential choice of Korean chaebol in earnings management. Consistent with our prediction, we find a negative association between chaebols ownership and accrual-based earnings management, whereas there is no clear difference between chaebols ownership and real-based earnings management. Furthermore, we find evidence that chaebols exhibit a strongly positive relationship with overproduction-based real activities manipulation, indicating that chaebols prefer overproduction as a method of real earnings management. From additional analyses, we also find that abnormal cash flow from operations is negatively associated with suspect chaebol firm-years that just met zero.
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