Family Influence on Earnings Smoothing: Ownership, Supervision, Management

• In Event: Earnings Management: International Evidence I

Abstract

We examine how family involvement affects the earnings smoothing of German firms. We base
our work on data for stock-listed firms in the period from 2005 to 2011. We find that German
family firms engage in more intensive earnings smoothing than non-family firms. For family
firms, we find that higher intensities of family involvement are associated with higher extents of
earnings smoothing. The earnings smoothing of German family firms increases from pure family
ownership to family supervision to family management to family supervision and management.
Our results are robust to several additional tests.

Authors

• Martin Glaum, University of Giessen

• Stefanie Kaiser, University of Giessen