투자자 관심과 실물이익조정 = Investor Attention and Real Earnings Management

다국어 초록 (Multilingual Abstract)

This study investigates the role of individual investors in corporate governance by examining the relationship between investor attention and real earnings management (REM). REM, as an opportunistic tool employed by managers, involves distortions in real business activities, which negatively affect firm value but remain outside the scope of legal sanctions. Therefore, identifying effective monitoring mechanisms to restrain REM is a critical research issue. Despite individual investors comprising a substantial portion of shareholders, their role in corporate governance has been relatively overlooked. With the advancement of information technology, however, their influence in capital markets has increased, suggesting the potential for individual investors to function as informal external monitors.
Using a dataset of 10,087 firm-year observations of non-financial listed companies in Korea from 2018 to 2023, we measure investor attention by the volume of posts on Naver Stock Forums. REM is calculated using three combinations of abnormal cash flows, abnormal production costs, and abnormal discretionary expenses based on prior research. The results show a significant negative association between investor attention and REM, particularly for firms with favorable information environments—those followed by analysts, audited by Big 4 firms, or larger in size. This suggests that the monitoring function of individual investors becomes more effective under better information environments. Additional analysis using only accounting-related posts to measure investor attention yields consistent results. In contrast, no significant association is found between investor attention and accrual-based earnings management.
This study contributes to the literature by empirically demonstrating the role of individual investors in constraining REM, highlighting their importance as informal monitors within the corporate governance framework. Furthermore, the findings underscore the need to improve firms’ information disclosure quality and establish a transparent communication infrastructure to enhance investor access and interpretability.