Earnings management, Ownership concentration and Capitalization of Research & Development expenditure

This study investigates the relationship between earnings management (EM) and capitalization of research and development (R&D) expenditure from the perspective of major shareholders expropriation, using Modified Jones Model and Bidirectional Fixed Effect Model for the period 2009–2018. And the study further discusses the moderating effect of ownership concentration on the relationship between earnings management (EM) and capitalization of research and development (R&D) expenditure. Our results confirm that the level of accrued earnings management (EM) presents a positive impact on capitalization of research and development (R&D) expenditure. The effect of the shareholding ratio of the biggest shareholder on the relationship between accrued EM and capitalization of R&D expenditure is inverted U-shape.