The influence of earnings management on bank efficiency: Evidence from frontier markets
The influence of earnings management on bank efficiency: Evidence from frontier markets
This study examines the relationship between bank efficiency and earnings management (EM) using a large sample of banks from 22 frontier market countries from 2011 - 2018, We hypothesise that EM via loan loss provision (LLP) and loan loss reserves (LLR) adversely impacts bank efficiency. Employing stochastic frontier analysis as a technical efficiency measurement, and random effects and truncated regression to reveal their relationship, we find support for this prediction. Also, in three of the