Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5103599 | The Quarterly Review of Economics and Finance | 2017 | 7 Pages |
Abstract
Firms that sponsor a defined benefit pension plan are suspected of managing earnings through the choice of the expected long-run rate of return to pension assets. However, data on this rate show it to be quite persistent with more than 50% of firms leaving their ERR unchanged from one year to the next. To capture this persistence, I model the rate using a first-order autoregression. Asset allocation information is included in the model. Endogeneity bias is addressed by estimating the dynamic panel data model using a system GMM estimator. No evidence of earnings management, measured by the relative size of the pension plan to net income and by acquisition activity, was found.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Joanne M. Doyle,