Convex Relationship Research Articles

Experimental investigation on low-velocity seepage characteristics and influencing factors in a shale oil reservoir

The seepage behavior in shale oil reservoir is very complicated. In this study, the characteristics and influencing factors of low-velocity seepage in brittle shale oil reservoirs were investigated by high precision experimental methods. The velocity used in this study was as low as 10−4 ml/min, and at least eight different flow rates were measured for each experiment. During the operation, the pressure difference between the inlet and outlet was controlled within 0.35 MPa to eliminate the influence of stress sensitivity. The effects of core permeability, fluid viscosity, pore pressure, and propped artificial fracture on the seepage behavior were analyzed. The results show that the seepage flow rate and pressure gradient in shale core samples presents a convex relationship, which is entirely different from the results of a concave relationship in tight sandstone oil reservoirs. The slippage effect and boundary layer effect in the flow channels were investigated to explain the convex flow regime theoretically. The convex shape flow regime is caused by the heterogeneous of shale core samples associated with the completed developed micro-fractures in this area. The seepage flow divides into two stages: the non-linear stage when the applied pressure gradient is lower than 2 MPa/m and the linear stage when it is higher than 2 MPa/m. The non-linear seepage characteristics become more obvious with a higher viscosity crude oil. With the increase of pore pressure, micro-fractures in shale core samples gradually close, leading to the reduction of flowing channel and the significant decrease of apparent permeability. The seepage characteristics are similar to those of tight sandstone oil, and the flow rate and pressure gradient curve presents a concave shape. With a propped artificial fracture, the seepage flow behavior follows Darcy's law. This work provides a feasible and reliable method and valuable experiment data for the study of low-velocity seepage in shale reservoirs.

Advertising expenses and operational performance: Evidence from the global hotel industry

We investigate the impact of advertising on hotel management companies’ (HMC) operational efficiencies on a sample of 90 international HMCs over the period 2010–2019. We employ time-dependent conditional frontier estimators to investigate the effect on HMCs’ technological change and technological catch-up levels. Our findings support the existence of a non-monotonic convex relationship between HMCs’ advertising expenses and their operational performance. Lastly, we also utilize the double bootstrap approach in a truncated regression setting to validate the overall effect of advertising expenses on HMCs’ operational performance levels. The findings suggest that advertising expenses decrease operational inefficiencies.

The influence of local development on the impact of natural disasters in Northeast Brazil: The case of droughts and floods in the state of Ceará

AbstractUsing data from the Damage Assessment Reports from the Civil Defence, the current study investigates the relationship between the damage caused by natural disasters and local development at the municipality level in Ceará state, Brazil. The results show that a better urban and water supply infrastructure, a lower population density, and a higher proportion of own revenues relative to total revenues are associated with smaller disaster damage. However, economic development in terms of GDP per capita exhibits a convex relationship with the impact of natural disasters across municipalities, reflecting the potential decreasing returns of preventive investments due to the highly hazardous environment that involves municipalities.

Contractual and Tournament Incentives in the Mutual Fund Industry

I study the impact of contractual incentives on the behaviour of mutual fund managers in annual tournaments. I show that linear contracts as opposed to concave ones induce managers to make larger risk adjustments in response to their relative performance ranks. I argue that contracts with linear fee structure directly translate the convex relationship between past fund returns and fund size into a convex relationship between past performance and managerial pay, whereas concave contracts distort this relationship and make it less convex. I also demonstrate that higher fee rates encourage fund managers to engage into annual tournaments, as they strengthen the connection between fund size and managerial pay in comparison with lower fee rates. The above results are robust to controlling for funds characteristics, such as fund size, age and turnover, as well as year and style-fixed effects.

The compensating effect of glaciers: Characterizing the relation between interannual streamflow variability and glacier cover

AbstractMeltwater from glaciers is not only a stable source of water but also affects downstream streamflow dynamics. One of these dynamics is the interannual variability of streamflow. Glaciers can moderate streamflow variability because the runoff in the glacierized part, driven by temperature, correlates negatively with the runoff in the non‐glacierized part of a catchment, driven by precipitation, thereby counterbalancing each other. This is also called the glacier compensation effect (GCE), and the effect is assumed to depend on relative glacier cover. Previous studies found a convex relationship between streamflow variability and glacier cover of different glacierized catchments, with lowest streamflow variability at a certain optimum glacier cover. In this study, we aim to revisit these previously found curves to find out if a universal relationship between interannual streamflow variability and glacier cover exists, which could potentially be used in a space‐for‐time substitution analysis. Moreover, we test the hypothesis that the dominant climate drivers (here precipitation and temperature) switch around the suggested optimum of the curve. First, a set of virtual nested catchments, with the same absolute glacier area but varying non‐glacierized area, were modelled to isolate the effect of glacier cover on streamflow variability. The modelled relationship was then compared with a multicatchment data set of gauged glacierized catchments in the European Alps. In the third step, changes of the GCE curve over time were analysed. Model results showed a convex relationship and the optimum in the simulated curve aligned with a switch in the dominant climate driver. However, the multicatchment data and the time change analyses did not suggest the existence of a universal convex relationship. Overall, we conclude that GCE is complex due to entangled controls and changes over time in glacierized catchments. Therefore, care should be taken to use a GCE curve for estimating and/or predicting interannual streamflow variability in glacierized catchments.

Depressed demand for crop insurance contracts, and a rationale based on third generation Prospect Theory

AbstractWhen actuarially fair insurance for a major risk is available then standard economic theory posits that those subject to the risk should insure. In agriculture, it is common for producers to decline contract offers where presubsidy premiums just cover average losses and subsidies are substantial. This paper seeks to shed light on why demand is curtailed. In a mail survey of U.S. corn and soybean producers we solicited Willingness to Pay (WTP) for actuarially fair insurance at different coverage levels. We find demand to be so low that median WTP is no larger than fair premium when adjusted down by current subsidy rates, which pay for one half or more of most premium charges. WTP as a share of the fair rate is especially low when risk of loss is high. There is limited evidence that respondents appreciate the convex relationship between coverage level and expected indemnity payoff. Third generation Prospect Theory is shown to be consistent with observed findings. In particular, a strong distaste for paying premium can be rationalized by loss aversion. Furthermore, when high revenue outcomes are more likely than not, that is, negative skewness, then higher loss aversion, greater decision weight distortions and greater risk aversion will decrease WTP.

Tibetan sheep grazing modifies rodent density and their interactions effect on GHG emissions of alpine meadow

Digging and mound-building by rodents lead to considerable disturbances in the topsoil and may affect plant composition, soil properties. However, little is known about the effects of these activities on GHG emissions, especially under different grazing management. This paper aimed to measure changes in CO2 and CH4 efflux with varying grazing management during the warm and cold seasons and to relate CO2 and CH4 efflux to pika burrow density and zokor mound density with different grazing management. Results of this study showed that CO2 efflux was significantly affected by the grazing season, whereas CH4 efflux was significantly affected by the grazing system. There were significant relationships between GHG efflux and rodent population density which were regulated by grazing management. CO2 efflux increased linearly with rodent density under seasonal continuous grazing in warm season. CO2 and CH4 efflux and rodent population density showed a significant quadratic convex relationship under rotational grazing at 24 SM/ha in warm and cold seasons and rotational grazing at 48 SM/ha in cold season. Under rotational grazing at light stocking rate (24 SM/ha), appropriate populations of rodents were beneficial for decreasing GHG emissions. This results also used to help drive a best-practices model for grazing practices of local herders.

Firm capital dynamics in centrally cleared markets

AbstractWe develop a tractable continuous time model of multifirm capital dynamics in a centrally cleared market. Our framework jointly models the strategic interactions between business operations of firms and their trading activities. We show that the endogenous allocation of firm capital between trading and operations can be recovered as the unique fixed point of a system of quadratic equations. Our model predicts that (a) there exists a convex relationship between equilibrium margins and firm capital in the cross‐section, (b) market collateral demand is positively correlated with size concentration, and (c) size concentration is expected to increase over time. Using proprietary data on bilateral credit default swap exposures, we provide evidence that the convexity prediction is both economically and statistically significant and validate our model assumption that firms hedge excess risks.

Germination variation facilitates the evolution of seed dormancy when coupled with seedling competition

Fluctuating environmental conditions have consequences for the evolution of life histories because they cause fitness variance. This variance can favor risk-spreading strategies, often known as bet-hedging strategies, in which growth or reproduction is spread over time or space, with some costs, but greater certainty of success. An important example is seed dormancy in annual plants, in which some fraction of seed remains dormant at any given germination opportunity with the potential of germinating later when environmental conditions may differ. Previous theory shows that environmental variation is critical for the evolution of dormancy. However, these studies have focused on temporal variation in reproduction, ignoring the strong observed effects of environmental variation on the germination fraction, a major contributor to fitness variance. We ask what effects germination fluctuations have on selection for dormancy by adding germination fluctuations to existing density-independent (d.i.) and density-dependent (d.d.) models of annual plant dynamics, extending previous analyses by including temporally fluctuating germination. Specifically, we ask how germination variance affects selection on the temporal average germination fraction, here used to define dormancy. When present alone, or when independently varying with other fitness components, germination fluctuations do not affect selection for dormancy in the d.i. model, despite generating fitness variance because this variance contribution is not reduced by higher dormancy. Germination fluctuations have strong effects in the d.d. model, favoring dormancy when present either alone or coupled with variation affecting plant growth. This is because germination variation causes seedling density to vary, which causes variable reproduction through variable intraspecific competition. Dormancy is advantaged under variable reproduction because it creates a more convex relationship between population growth and reproduction leading to benefits from nonlinear averaging. Predictive germination, a positive statistical association between germination and growth, weakens selection for dormancy under strong competition and strengthens it when competition is weak. Our results suggest that variable germination is a potential explanation for high levels of dormancy observed in nature, with implications for life-history theory for fluctuating environments.

Offering subsidies to logistics providers and consignors

Firms aim to achieve time-based competitiveness to reach their target market sooner and better to meet consumers’ changing demands and cater to rapidly changing markets. One efficient approach is to speed up logistics performance. To generate positive social externality in social welfare, the government can provide subsidies to faster—but also higher cost—logistics providers and encourage customers to choose these providers. This study examines the influence of government subsidies to railway logistics providers and consignors on market equilibrium. We find that subsidization affects the price, demand, and profits of logistics providers. However, the impact on demand and profits remains the same regardless of whether the subsidy is provided to the railway logistics provider or railway consignor. These results are consistent whether the transportation cost is subject to economics of scale or not. The profit of each logistics provider has a concave relationship with its own transportation time but a convex relationship with its competitor’s transportation time. The key factors that determine the optimal subsidy and its impact on social welfare include the unit operational cost of the railway logistics provider and the logistics provider's time-based differentiation and time values of consignors. In addition, the government provides the highest unit subsidy when the railway logistic provider optimizes its profit at the optimal transportation time. When customer demand is stochastic, we find both the fluctuation level of customers’ demand and the logistics providers’ risk attitude influence the government’s optimal subsidy amount. Providing an optimal subsidy helps to efficiently guide the competitive market and enhance social welfare.

Temporary Agency Work and Firm Performance: A Replication Study with Extensions

Abstract The authors analyze the nexus between temporary agency work (TAW) and firm performance. Compared to Hirsch and Mueller (2012, The Productivity Effect of Temporary Agency Work: Evidence from German Panel Data. Economic Journal 122 (562): F216-F235) and Nielen and Schiersch (2014, Temporary Agency Work and Firm Competitiveness: Evidence from German Manufacturing Firms. Industrial Relations 53: 365–393), the authors support a concave relationship between the TAW share and productivity, but find a convex relationship between the TAW share and unit labor costs, instead of a u-shape. Moreover, a new finding is that the correlation between the TAW share and profitability is only moderate.

Private equity characteristics and performance: An analysis of North American venture capital and buyout funds

AbstractThe paper investigates the relationship between fund performance and fund characteristics of North American private equity (PE) funds, by analyzing the interactions of fund size, fund sequence, and past fund performance on traditional fund return measures. The empirical evidence is based on both linear and polynomial regressions, on a sample of 345 venture capital (VC) and 411 buyout (BO) funds with vintage year over the period 1995–2010. We document a concave relationship between fund size and performance, persistence in PE performance, as well as a convex relationship between fund sequence and performance. We suggest both the optimal fund size and the optimal fund sequence number. Economic implications for investors and general partners are discussed as well.

Portfolio Manager Ownership and Mutual Fund Risk Taking

This paper studies the effect of portfolio manager ownership (i.e., “skin in the game”) on mutual fund risk taking. Using holdings-based risk change measures that capture managers’ ex ante risk choices, we find that portfolio manager ownership reduces both intrayear and across-year risk-taking activities. The relationship between ownership and risk reduction is particularly strong among managers with high agency issue–induced risk-taking incentives—for example, managers who face a more convex flow-performance relationship, have poor past performance, or are not compensated based on long-term fund performance. Funds with greater managerial ownership are also associated with lower levels of total risk and downside risk. Overall, portfolio manager ownership serves as an incentive alignment mechanism and has important implications for mutual fund investors. This paper was accepted by Amit Seru, finance.

Idelalisib for Treatment of Follicular Lymphoma and Chronic Lymphocytic Leukemia in Clinical Trials Versus the Real World: Treatment Duration and Survival Are Associated with Pretreatment Modified Charlson Score

Background: Idelalisib (IDEL) is a phosphatidylinositol-3 kinase (PI3K) inhibitor approved as a single agent for treatment of relapsed follicular lymphoma (FL) and in combination with rituximab for treatment of relapsed chronic lymphocytic lymphoma (CLL). The clinical trials supporting IDEL approval excluded patients with many comorbidities. We sought to investigate whether higher comorbidity burden among real world (RW) patients receiving IDEL might lead to differences in treatment duration, overall survival, or infection rates compared to clinical trial (CT) subjects.Methods: CT data from the sponsor and RW data from Medicare were obtained for patients aged ≥65 years receiving: 1) IDEL monotherapy for FL or 2) IDEL with rituximab (IDEL+R) for CLL. A pretreatment modified Charlson Score (mCS; Quan H, 2011) was calculated using medical records for CT subjects and diagnostic reimbursement codes for RW beneficiaries. Treatment duration for IDEL was calculated from treatment start until the last patient contact for CT subjects and until the final day supply for RW beneficiaries. Overall survival was obtained from intention to treat data for CT subjects and through linkage to Social Security for RW beneficiaries. Serious infections were coded as Grade ≥3, as a serious adverse event, or required intravenous antibiotics for CT subjects. For RW beneficiaries, serious infections were obtained through manual abstraction of hospital discharge diagnoses or coded with intravenous antibiotics in emergent care. Fatal infections were defined as serious infections within 30 days prior to death. Results are reported descriptively and using Cox Proportional Hazards Models, adjusted by age, gender, mCS, and US location. Statistical modeling was intended to describe the generalizability of CT results to unselected RW population.Results: A total of 26 CT subjects aged ≥65 years receiving IDEL monotherapy for FL from Study 101-09 were compared to 305 RW beneficiaries aged ≥65 years receiving IDEL for FL. A total of 89 CT subjects aged ≥65 years receiving IDEL+R for CLL in Study 312-116/117 were compared to 294 RW beneficiaries aged ≥65 years receiving IDEL+R for CLL. Key clinical comparisons are presented in the table below.Age and mCS•RW beneficiaries receiving IDEL for FL had more patients ≥75 years (54% vs 35%) and with a mCS >3 (52% vs 12%) than CT subjects.•RW beneficiaries receiving IDEL+R for CLL had more patients ≥75 years old (52% vs 36%) and with a mCS >3 (52% vs 24%) than CT subjects.Idelalisib Persistency•CT subjects had a longer median idelalisib treatment duration and a lower treatment discontinuation rate by day 180 compared to RW beneficiaries. Differences were more pronounced for CLL.•A nonlinear, convex relationship was observed between mCS and treatment discontinuation among RW beneficiaries, indicating a higher mCS predicts more (than linearly expected) reduction in treatment duration. Few CT subjects had a mCS >3.Overall Survival•Mortality was numerically worse for RW beneficiaries with FL (HR 1.39 95%CI: 0.69-2.78) or CLL (HR 1.40 95%CI: 0.93, 2.11) compared to CT subjects.•Among RW beneficiaries, each 1-point increase in mCS predicted a 10% (95%CI: 1.06, 1.14) increase in overall mortality for FL and CLL. Among CT subjects with CLL, mortality was worse for subjects with mCS >3 than for subjects with mCS ≤3 (HR 2.25, 95%CI: 1.13-4.49). Analysis of mCS among FL subjects had insufficient sample size.Serious Infections•Serious infections occurred more frequently by day 180 in RW beneficiaries than CT subjects for FL (32.1% vs 19.2%) but not for CLL (34.0% vs 38.2%).•RW beneficiaries had higher rates of fatal infections for both FL (27.6/100PY vs 18.6/100PY) and CLL (18.4/100PY vs 9.8/100PY) compared to CT subjects.Conclusions: The RW beneficiaries were older and had higher comorbidity burden compared to subjects ≥65 years included in CTs. RW beneficiaries had a shorter treatment duration, higher mortality rates, and higher fatal infection rates than CT subjects. Higher comorbidity, as measured through a pretreatment mCS, was associated with worse study outcomes. CT inclusion and exclusion criteria should allow enrollment of patients who are representative of the intended treatment population to maximize generalizability of CT results.Acknowledgment: Clinical trial data provided by Gilead Sciences, Inc. [Display omitted] DisclosuresNo relevant conflicts of interest to declare.

Yaşın Firmanın Performansı Üzerindeki Etkisi: Aile Şirketlerinden İncelemeler

Bu araştırmada, gelişmekte olan bir ülke olarak sınıflandırlan Türkiye’deki aile şirketleri analiz edilerek firmanın yaşı ve firma performansı arasındaki bağlantı araştırılmıştır. 2008 ve 2016 yılları arasında, borsada işlem gören ve finans sektöründe olmayan 38 aile şirketinin verileri en küçük kareler yöntemi uygulanarak analiz edilmistir. Firmanın performansını ölçmek için firmanın karı kullanılmıştır. Kâr, firmanın faiz ve vergi öncesi karının toplam varlıklara bölünmesiyle hesaplanmıştır. Sonuç olarak, aile şirketlerinde firma yaşı ve kârlılığı arasındaki konveks bir ilişki bulunmuştur. Diğer bir değişle, genç firmaların belirli bir yaşa gelene kadar daha yüksek kazançlar elde ettikleri sonucuna varılmıştır. Fakat belirli bir olgunluğa eriştikten sonra yaşlı firmalar, genç firmalardan daha iyi performans göstermektedirler. Bu sonuç değişen varyansı kontrol ettiğimiz zaman ya da farklı bağımsız değişkenler olan likidite, borç oranı veya aktif devir hızını eklediğimiz zaman da geçerli olmaktadır.

Three Gorges Dam: polynomial regression modeling of water level and the density of schistosome-transmitting snails Oncomelania hupensis

BackgroundSchistosomiasis remains a major public health concern in China. Oncomelania hupensis (O. hupensis) is the sole intermediate host of Schistosoma japonicum, and its change in distribution and density influences the endemic S. japonicum. The Three Gorges Dam (TGD) has substantially changed the downstream water levels of the dam. This study investigated the quantitative relationship between flooding duration and the density of the snail population.MethodsTwo bottomlands without any control measures for snails were selected in Yueyang City, Hunan Province. Data for the density of the snail population and water level in both spring and autumn were collected for the period 2009–2015. Polynomial regression analysis was applied to explore the relationship between flooding duration and the density of the snail population.ResultsData showed a convex relationship between spring snail density and flooding duration of the previous year (adjusted R2, aR2 = 0.61). The spring snail density remained low when the flooding duration was fewer than 50 days in the previous year, was the highest when the flooding duration was 123 days, and decreased thereafter. There was a similar convex relationship between autumn snail density and flooding duration of the current year (aR2 = 0.77). The snail density was low when the flooding duration was fewer than 50 days and was the highest when the flooding duration was 139 days.ConclusionsThere was a convex relationship between flooding duration and the spring or autumn snail density. The snail density was the highest when flooding lasted about four to 5 months.

Age-of-Arrival Effects on the Education of Immigrant Children: A Sibling Study

We analysed the effects of late entry on the human capital of immigrant children, and investigated the channels via which age-at-migration affects the native-immigrant education gap. Ordinary-least-squares estimates could have been biased if parents factored the age of children into their migration decision. Using a sample of siblings from the 2000 US Census, we employed a family fixed-effects estimation strategy and found a negative and convex relationship between human capital and age-of-arrival. Teenage entrants’ outcomes were worst affected compared to younger entrants. Language was found to be an important mediating factor via which age-of-arrival influenced education. The critical age for English proficiency was 8–10. Age-of-arrival affected education not only through language but also via heterogeneous origin country conditions. The additional privileges of birth-right citizenship, if any, were disentangled from the benefits of zero age-of-arrival for natives. Citizenship by birth provided few advantages, except for college enrollment. Results were robust to sample selection changes.

Growing on the street: Multilevel correlates of street tree growth in Montreal

Tree planting has been favoured in many North American cities, including Montreal which aims to increase its canopy from 20% to 25% in 2025. However, the mortality rate of street trees is especially high in the first few years after planting. Studies have shown that variables that are intrinsic to the tree and those related to its location, the urban form and the socio-demographic characteristics of the surrounding environment are significantly associated either with trees’ survival rate or with vegetation cover. In this research we examine variables that have statistical associations with tree growth, which is the diameter at breast height divided by the number of years on the ground, for approximately 28,000 street trees in Montreal. Independent variables were nested into three spatial scales: the tree (species and physical variables), the street section (urban form variables), and the census tract (socio-demographic variables). Multilevel models reveal that 65.51% of the growth variance is potentially explained by the species and planting physical conditions such as the east and north sides (positive associations with the growth), signage as an obstruction (negative association). 28.54% of the grow variance is potentially explained by the urban form, in our case building age (convex relationship with the growth), mixed zoning (negatively) and residential zoning (positively). At the neighbourhood level, although none of our variables is significant, 6.95% of the growth variance is be potentially explained by other missing variables. New planting programs should hence consider the urban form in order to improve tree growth.

Working capital financing and corporate profitability of Indian manufacturing firms

PurposeThe purpose of this paper is to provide empirical evidence about the relationship between working capital financing (WCF) and firm profitability in six key manufacturing sectors of Indian Economy. It also aims to capture the change in the financing of working capital requirement over different scenarios of price-cost margin and financial flexibility.Design/methodology/approachThe study is undertaken on a sample of 1,211 firms from 6 key manufacturing sectors of Indian economy from 2000 to 2016. The non-linear relationship between WCF and profitability is studied using two-step generalized model of moments (GMM) estimator.FindingsThe study finds a convex relationship between WCF and profitability among firms in chemical, construction, and consumer goods sectors. Firms in these sectors can finance larger portion of their working capital requirements through short-term debt without negatively impacting profitability. However, a concave pattern of relationship for firms in machinery, metal, and textile industries implies increasing debt financing of working capital requirement would increase profitability for the firms who have financed lower portion of their working capital by short-term bank borrowing. But when a higher proportion of working capital requirements are already financed by short-term debt, a further increase in debt financing may impact profitability negatively. Moreover, the study finds that firms with high financial flexibility and high price-cost margin (except textile) can increase profitability by financing larger portion of working capital requirement through short-term debts and the continuation with risky WCF could increase profitability.Originality/valueThe study contributes to the literature on working capital in a number of ways. First, no previous study has been undertaken to explore the non-linear relationship between WCF and corporate profitability over a large sample of firms from six key manufacturing sectors of Indian economy. Second, the study uses a quadratic function to explore the non-linear relationship between WCF and profitability. Third, the study explores the relationship between WCF and profitability with respect to the price-cost margin and financial flexibility of firms under different manufacturing sectors of Indian economy. Finally, the study uses advanced two-step GMM, the panel data techniques to handle unobservable heterogeneity and issues of endogeneity within the data sample.

PENGARUH KUALITAS AUDIT TERHADAP KECENDERUNGAN PERUBAHAN PERILAKU MANAJEMEN LABA: STUDI EMPIRIS PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA PERIODE 2012-2015

<p><em><span style="font-size: small;">The improvement of International Financial Reporting Standard (IFRS) may narrow the chance of discretionary accrual earnings management. As a result, there will be changes in the behavior of earnings management from accrual to real earnings management. The aims of this research are to investigate the influence of audit quality on the changes of earnings management behavior from accrual to real earnings management. This research emphasizes audit quality in competency and independency through audit firm tenure and audit firm rotation </span></em></p><p><em><span style="font-size: small;"> </span></em></p><p><span style="font-size: small;"><em>The sample used in this research were manufacturing companies listed at Indonesia Stock Exchange 2012-2015. </em><em>Samples are collected by purposive sampling and resulted in 58 firms as the final sample. This research used quadratic model to investigate the relationship between audit firm tenure with real earnings management. The statistic method used was multiplied analysis multiple linear regression, with hypotheses testing of statistic t </em><em>using a significance level (α) = 5%. The statistical tool used is Eviews 8.</em></span></p><p><em><span style="font-size: small;"> </span></em></p><p><span style="font-size: small;"><em>The results of this research showed that audit firm tenure has a significant influence to the real earnings management, while audit firm rotation, firm size, and leverage has no significant influence to the real earnings management. The results also showed that audit firm tenure has concave relationship with real earnings management (convex relationship with audit quality). </em><em>This indicates that audit quality measured by audit firm tenure can decrease real earnings management in the fifth year and afterwards because the increase of audit quality through audit competence is greater than the decrease of audit independence</em></span><em></em></p><p><em><span style="font-size: small;"> </span></em></p><strong><em>Keywords : </em></strong><em>real earnings management, audit firm tenure, audit firm rotation, concave, convex, quadratic model</em>