Impact of Ownership Structure on Earnings Management: Evidence from Pakistani Banking Sector

Abstract

This study aims to find out the impact of ownership structure on firm s’ earning management. Ownership structure is divided into two categories: ownership concentration and ownership mix. Banking sector of Pakistan was chosen for this study and 20 banks were selected. Study period was 2000-2012. Data was collected related to ownership concentration and ownership mix variables. Results showed that independent variables including major shareholders, directors, government and financial institutions negatively affect earnings management of banks. Ownership by local, foreign investors/companies and associated organizations’ ownership positively affects earning management of banks.

Keywords: Ownership concentration, ownership mix, earning management