Christian Leuz, Dhananjay Nanda and Peter D. Wysocki EARNINGS MANAGEMENT AND INVESTOR PROTECTION: AN

THIS PAPER PROVIDES COMPARATIVE EVIDENCE on corporate earnings management across 31 countries. At a descriptive level, we find large international differences across several earnings management measures, including loss avoidance and earnings smoothing. Our descriptive evidence suggests that firms in countries with developed equity markets, dispersed ownership structures, strong investor rights, and legal enforcement engage in less earnings management. We then delve deeper and present an incentivesbased explanation for these patterns.