We use Tobin’s q models of investments to estimate the relationship between corporate governance and the level of innovative activity. Simple ordinary least squares (OLS) models suggest that poor governance reduces innovative activity. However, OLS results are sensitive to controlling for...

Prior research shows that a greater level of cumulative accrual earnings management (AEM) over prior periods limits managers' ability to use AEM in the current period and has suggested that this constraint on AEM is associated with greater use of real earnings management (REM). First, we confirm...