"Effects of earning management on stock returns - A case of manufacturing companies listed on Ho Chi Minh stock exchange (HOSE)"
Abstract
The paper examines the influence of earnings management on abnormal returns from
stocks in Vietnamese manufacturing companies. The sample is selected from 184
manufacturing companies listed on Ho Chi Minh Stock Exchange (HOSE) in 5 year
period from 2010 to 2014. The measurement by Leuz et al.'s (2003) is used in the
estimation of independent variable- earnings management. In addition, four control
variables including firm’s size, age, leverage and return on equity are also taken into
account in this study. The penal data regression method is employed in order to
ascertain the significant relationship between earnings manipulation and abnormal
stock earnings. Specifically, Earnings Management, Firm’s Leverage and Firm’s Age
positively affects abnormal returns while Firm’s Size is proven to have significant
negative relationship with abnormal stock earnings. The results also presents that there
is no significant correlation between Return on Equity and Earnings from stocks of
Vietnamese manufacturing firms.
Keywords: Earnings Management, Returns, Ho Chi Minh Stock Exchange (HOSE).