The Spillover Effect of Peer CEO Turnover on Real Earnings Management

ABSTRACT A growing literature provides evidence that peer considerations play a central role in shaping firm’s behavior. This paper documents the frequency of forced CEO turnovers by product market firms is negatively associated with real earnings management. I find disciplinary turnover explains observed relation. These effects are stronger when suspected to engage management meet or just beat benchmarks. some peers’ reveal link between and subsequent operating failure. Overall, my findings suggest observing an informative signal discipline Data Availability: used this study available from public sources identified text. JEL Classifications: M41; M12.