Does ownership concentration matter for the relationship between CEO characteristics and real earnings management: evidence from Jordan

Purpose The current research inspects the moderation role of ownership concentration on chief executive officer (CEO) characteristics and real earnings management (REM) relationship in Jordan. Design/methodology/approach Driscoll–Kraay regressions were run using data from 348 firm-year observations for companies listed on the Amman Stock Exchange between 2013 and 2018. Findings Driscoll–Kraay regressions demonstrate that CEO experience, tenure and political connections improve REM practices. Ownership concentration diminishes and limits REM practices when combined with CEO experience, tenure and political connections, since all three have a negative and significant link with REM. Research limitations/implications Initial constraints include the study’s lack of generalisability due to a small number of CEO-related parameters. Second, critics of the ideal model for judging EM have a foreseeable flaw. No generally accepted model is perfect. Practical implications This study’s conclusions are crucial for industry participants, including companies, policymakers, investors and the general public. These findings will help investors, practitioners and regulators understand that businesses with significant ownership concentrations and experienced CEOs have superior earnings and low REM practises. Social implications The findings of this study have an optimistic impact on the existing body of knowledge. The current literature has yet to properly inspect the moderation role that ownership concentration has on the connotation between CEO characteristics and EM. Originality/value Despite several research studies in both developed and developing nations, ownership concentration has been almost virtually neglected. The current study could fill a hole in earlier research, rendering it a novel study.