In particular, we hypothesize that both raising capital in public markets rather than from private sources and the institutional environment in which a firm operates have a systematic influence on its incentives to report earnings that reflect economic performance. Both factors shape the way in which information asymmetries between the firm and its key financing parties are resolved and the role earnings play in the process, which in turn affects the properties of reported earnings (see also Ball et al., 2000). Incentives from Raising Capital in Public Markets Privately held firms and those with publicly traded debt or equity securities face very different demands for accounting information. Raising.
