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dc.contributor.authorBova, Francesco
dc.contributor.authorDou, Yiwei
dc.contributor.authorHope, Ole-Kristian
dc.date.accessioned2020-06-05T13:01:09Z
dc.date.available2020-06-05T13:01:09Z
dc.date.created2020-02-26T14:37:03Z
dc.date.issued2019
dc.identifier.citationJournal of Accounting, Auditing and Finance. 2019, 34 (3), 483-508.en_US
dc.identifier.issn0148-558X
dc.identifier.urihttps://hdl.handle.net/11250/2657029
dc.description.abstractHealth insurance premiums account for a significant portion of the cost base of U.S. corporations. A recent study finds that health insurance premiums increase for firms that experience positive profit shocks, suggesting that the U.S. health insurance market is not perfectly competitive. Motivated by this finding and the economic importance of health insurance premiums, this is the first study to examine firms’ earnings management incentives in the face of insurance carriers with strong bargaining power. We use an innovative data set for a large sample of U.S. firms with detailed information on insurance premiums and insurance plan characteristics. Using an economic shock to insurance firms’ bargaining power and difference-in-differences tests, we find that firms manage their reported earnings downward when insurance providers have strong bargaining power. We further show that this effect is more pronounced in settings in which there are ex ante reasons to expect stronger incentives to manage earnings downward. We also provide preliminary evidence suggesting that downward earnings management has the intended effect of mitigating future increases in health insurance premiums. Our analyses highlight an inefficient health insurance market as an important determinant of firms’ financial reporting choices.en_US
dc.language.isoengen_US
dc.publisherSageen_US
dc.titleHealth Insurer Bargaining Power and Firms’ Incentives to Manage Earnings: Evidence From an Economic Shocken_US
dc.typeJournal articleen_US
dc.typePeer revieweden_US
dc.description.versionacceptedVersionen_US
dc.source.pagenumber483-508en_US
dc.source.volume34en_US
dc.source.journalJournal of Accounting, Auditing and Financeen_US
dc.source.issue3en_US
dc.identifier.doi10.1177/0148558X17726141
dc.identifier.cristin1797855
cristin.ispublishedtrue
cristin.fulltextpostprint
cristin.qualitycode1


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