가동률 수준은 경영자의 과잉생산 실제이익조정에 영향을 미치는가?

The capacity utilization is an indicator of how actively a firm uses its production facilities, presenting managers’ view of current business condition as well as future performance. This study examines if the capacity utilization may affect real earnings management from a perspective of overproduction. Using firms listed on the KOSPI from 2001 to 2016, we find the positive relation between capacity utilization and real earnings management. As a result of analysis using nonlinear model, we find that there is an inverse U-shaped relationship between capacity utilization and real earnings management. This means that as the level of capacity utilization increases up to a certain level, real earnings management using overproduction also increases, but when the capacity utilization exceeds a certain level, the extent of real earnings management by overproduction decreases. In addition, the positive linear relationships with real earnings management were found in the sub-sample of firms with low level of capacity utilization, whereas there is a negative linear relationship with real earnings management in the sub-sample of firms with high level of capacity utilization. This finding implies that there is an minimum level of capacity utilization in order for firms to make earnings management using overproduction. Furthermore, the finding represent that firms with a very high utilization rate is likely to have high level of sales and be able to consume inventories, and therefore, they are not willing to manage earnings with overproduction that negatively affect their performance in the long run. These results suggest that earnings management through over-production may be affected by the level of capacity utilization. This study contributes related literature by adding evidence that the capacity utilization is one of factors which affect the level and/or pattern of real earning management through overproduction. In addition, this study provides practical implication that stakeholders outside firms such as investors, analysts, auditors and regulators can benefit from utilizing the information of the capacity utilization in understanding and evaluating the possibility of real earning management through overproduction and the potential risk from it.