경영자 능력이 연구개발비를 이용한 실제 이익조정에 미치는 영향

This study investigates whether managerial ability is associated with real earnings management(REM) focusing on cuts in discretionary investments in Research and Development(R&D) and to further extent, whether managerial ability influences the negative relation between REM and long-term operating performance. Although the role of managerial ability in financial reporting has been widely examined, whether and how managerial ability affects the adjustments in R&D investments in an attempt to increase reported earnings haven’t been deeply analyzed. Since many prior studies on REM face the challenge of differentiating between efficient reductions in R&D investments versus opportunistic reductions to manage reported earnings, we follow the recent paper that suggests a better reflective measure of REM, which is a reversal of an abnormal cut in R&D investments. Using Korean listed firms from 2000 to 2015, we provide evidence that firms with high-ability managers are less likely to engage in opportunistic REM. This suggests that high-ability managers are less likely to make decisions that destroy firm value. In addition, we provide evidence that high-ability managers mitigate the negative performance effects of REM. Our results are consistent with the premise that the more capable the manager, the better able he or she understands the negative long-run impacts of REM.