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CEO masculine behavior and earnings management: does ethnicity matter?

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Title: CEO masculine behavior and earnings management: does ethnicity matter?
Authors: Elsheikh, Tamer, Hashim, Hafiza Aishah, Mohamad, Nor Raihan, Youssef, Mayada Abd El-Aziz, Almaqtari, Faozi A.
Source: Journal of Financial Reporting & Accounting (Emerald Group Publishing Limited); 2025, Vol. 23 Issue 3, p959-983, 25p
Subject Terms: FIXED effects model, GOVERNMENT policy, STATISTICAL significance, EARNINGS management, CHIEF executive officers
Geographic Terms: MALAYSIA
Abstract: Purpose: This study aims to investigate the relationship between the Chief Executive Officers (CEOs') masculinity, CEO characteristics (accounting background, turnover and ethnicity/race) and earnings management (EM) in Malaysia. It also examined the moderating effect of the CEOs' ethnicity/race (Bumiputera and non-Bumiputera) on the relationship between CEO masculinity and EM. Design/methodology/approach: The analyses were based on a panel data set of 260 corporates listed on the Bursa Malaysia from 2009 to 2019. Python/code was used to calculate the facial width-to-height ratio (fWHR), while testosterone (TESTN) was calculated based on CEO age and fWHR. To estimate the results, panel data analysis with a fixed effect model was used. Findings: The result shows that fWHR and TESTN have a significant positive effect on EM. CEO race has a significant impact on EM, implying that non-Bumiputera CEOs are more likely to be associated with EM. There was no statistically significant evidence that race moderates the relationship between CEO masculinity and EM. Research limitations/implications: The research contributes to the growing evidence in the field of neuroscience that it is possible to infer aspects of an individual's behavior based on their facial structure and their TESTN levels. The findings provide new evidence supporting Malaysian Government policies in reducing masculinity on boards of directors and senior executive positions, which will positively affect the integrity of financial reports. Originality/value: To the best of the authors' knowledge, it is the first research to explain whether the ethnicity/race of CEOs is related to EM and whether it has a significant moderate effect on the relationship between masculinity and EM. [ABSTRACT FROM AUTHOR]
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Database: Complementary Index
Description
Abstract:Purpose: This study aims to investigate the relationship between the Chief Executive Officers (CEOs') masculinity, CEO characteristics (accounting background, turnover and ethnicity/race) and earnings management (EM) in Malaysia. It also examined the moderating effect of the CEOs' ethnicity/race (Bumiputera and non-Bumiputera) on the relationship between CEO masculinity and EM. Design/methodology/approach: The analyses were based on a panel data set of 260 corporates listed on the Bursa Malaysia from 2009 to 2019. Python/code was used to calculate the facial width-to-height ratio (fWHR), while testosterone (TESTN) was calculated based on CEO age and fWHR. To estimate the results, panel data analysis with a fixed effect model was used. Findings: The result shows that fWHR and TESTN have a significant positive effect on EM. CEO race has a significant impact on EM, implying that non-Bumiputera CEOs are more likely to be associated with EM. There was no statistically significant evidence that race moderates the relationship between CEO masculinity and EM. Research limitations/implications: The research contributes to the growing evidence in the field of neuroscience that it is possible to infer aspects of an individual's behavior based on their facial structure and their TESTN levels. The findings provide new evidence supporting Malaysian Government policies in reducing masculinity on boards of directors and senior executive positions, which will positively affect the integrity of financial reports. Originality/value: To the best of the authors' knowledge, it is the first research to explain whether the ethnicity/race of CEOs is related to EM and whether it has a significant moderate effect on the relationship between masculinity and EM. [ABSTRACT FROM AUTHOR]
ISSN:19852517
DOI:10.1108/JFRA-10-2022-0383