Authors: Leonidas Doukakis, Adam Aoun, Georgios Papanastasopoulos

Title: Family Ownership and the Accrual Anomaly: International Evidence

Abstract

Motivated by the unique nature of family firms and the puzzling persistence of the accrual anomaly worldwide, we study the presence and economic significance of the accrual anomaly separately for family and non-family firms using an international sample of 27,117 observations from 34 capital markets. At an individual stock level of analysis, we show that the negative relation of accruals with future earnings performance and stock returns is more pronounced within family firms, while it is highly attenuated within non-family firms. Evidence from portfolio-level analysis summarizes the economic significance of this finding. Overall, we conclude that agency problems, information uncertainty, and barriers to arbitrage could be key explanatory factors regarding the accrual anomaly’s occurrence and persistence within family firms.