An Empirical Study on the Relationship Between Foreign Investors and Earnings Quality

Yohan An


This study examines the impact of foreign investors on earnings quality in emerging capital market using Korean manufacturing firms’ panel data set, regarding competing for international investment and business opportunities during the period 2000 to 2012. This paper tests earnings quality using four proxies based on the International Financial Reporting Standards: 1) persistence, 2) value relevance, 3) conservatism, and 4) accruals quality. This research finds foreign investor is positively associated with only user needs earnings quality; persistence and value relevance. This result shows that the positive impact of foreign investor on earnings quality is evident but limited.

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Research in World Economy
ISSN 1923-3981(Print)ISSN 1923-399X(Online)


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