Top executive, earnings management and firm risk: Evidence from emerging economies

Using the upper echelon framework, the present study delves into the interplay between the financial styles of senior executives (CEOs and CFOs) and their impact on earnings and risk management within non-financial firms across BRICS countries: Brazil, Russia, India, China, and South Africa. The period of study is 2011–2022. The analysis utilizes panel data that aligns managers with their respective firms to track the fixed effects of managers on earnings and risk management practices. The overall result of the study underline that the financial styles of top executives, captured through their manager-fixed effects, along with their observable characteristics, exert significant influence on decisions related to earnings and risk management. This study's findings contribute a novel contextual perspective and enhance comprehension within the realm of emerging markets, thereby enriching the existing understanding of the subject matter.