While analyst earnings forecasts are crucial earnings benchmarks in equity valuation, existing studies provide no consensus on whether the market rewards firms for beating analyst earnings expectations. Using a sample of 9,898 firm-year observations from 1,821 unique Chinese listed firms over...

We examine the effectiveness of institutional investors in constraining aggressive earnings management induced by strong contractual incentives. To this end we focus on the consequences of earnings-related promises (covenants) negotiated between corporate controlling shareholders and minority...