Measuring managerial optimism and opportunism using non-GAAP earnings disclosure
Item
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Title
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Measuring managerial optimism and opportunism using non-GAAP earnings disclosure
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Identifier
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d_2009_2013:d15b55955497:11442
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identifier
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11920
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Creator
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Lee, Hakyin,
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Contributor
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Carol A. Marquardt
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Date
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2012
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Language
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English
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Publisher
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City University of New York.
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Subject
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Accounting | Management | Non-GAAP Earnings | Opportunism | Optimism | Overconfidence | Voluntary Disclosure
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Abstract
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In this dissertation, I propose and validate new measures of managerial optimism and opportunism using firms' non-GAAP earnings disclosures. I estimate the magnitude of managerial optimism versus opportunism using firm-level time-series regressions of non-GAAP exclusions on GAAP earnings and evaluate both the construct and criterion-related validity of these measures. I find that the non-GAAP earnings based measure of optimism is positively correlated with optimistic and point management earnings forecasts, and CEOs' delays in option exercising, while the measure of opportunism is positively correlated with the propensity to meet/beat analyst forecasts. These results provide evidence of construct validity. The measures also perform as expected in predicting firms' financial reporting, capital structure, and investment decisions, which provides criterion-related validity. Overall, these new disclosure-based representations perform well in capturing notions of managerial optimism and opportunism and offer researchers an easily-estimated, widely-available methodology for measuring these constructs.
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Type
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dissertation
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Source
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2009_2013.csv
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degree
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Ph.D.
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Program
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Business
