ESTIMATION FINANCIAL INFORMATION MANIPULATION BY NEGATIVE BINOMIAL HURDLE MODEL

Year 2012, Volume: 4 Issue: 1, 71 - 82, 01.06.2012

Funda H. Sezgin

Abstract

Manipulation is one of the important issues in securities markets because
manipulative actions send false signals to investors and make them buy or sell
securities. There are different types of manipulations that can deceive investors,
one type of which called financial information manipulation. Manipulators, who
use this kind of manipulation, distort information on financial statements in order
to give false information about the prospects of the issuing firms. The aim of the
manipulators is to deceive the investors and gain advantage at their expense.
In this study, it is aimed to develop an appropriate model in order to determine the
factors affecting the number of companies which has published false financial
statements at Istanbul Stock Exchange in 2010 year. Zero-inflated count data is
analyzed with Negative Binomial Hurdle Model in order to determine the
effective financial ratios.

Keywords

Financial Information Manipulation , Negative Binomial Hurdle model, Caunt data

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