Amir Kheirollah
Amir Kheirollah with his doctoral thesis The Art of Discretion

Three questions to Amir:

How did you choose your topic for the dissertation?

I started by reading classical articles in finance and finance theories in the beginning of the doctoral research programme. I continued by looking into some of these theories and the empirical reviews around the subject that interested me. In that way, I could see some patterns and already open questions in the literature that no one addressed, and it could eventually contribute to the research.

What research methods have you used?

I used quantitative methodologies in my research. I combined different regression methodologies and statistical methods. I formulated my hypotheses and my research design to support the frameworks and storyline in my articles. I used some of the standard methodologies in the literature and to address others I designed some frameworks.

What has been easy and difficult in your work with the thesis?

I think the hardest part of the work is in the very beginning, starting a career in academic research and having no clue about how to formulate and solve a problem in an academic context. Also, at the later stage of writing a dissertation, the storytelling part, and finding how to posit your research in a highly professional peer-reviewed academic field. I believe the tough part of research just makes it more appealing if you want to do something new.


This dissertation is a compilation of three articles on earnings management, governance, and capital structure. In addition to these three articles, the introductory chapter establishes the link between these articles and summarizes them.
Article I investigates the joint effect of governance mechanisms on earnings management. This study finds evidence in support of imperfect substitution and complement effects of corporate governance and industry regulation on earnings management.
Article II investigates the role of the discretionary environment for earnings management, using several measures of governance and contextual mechanisms. The findings of this article show that the discretionary environment matters in explaining earnings management practices. Therefore, the use of a tractable and quantifiable measure of the discretionary environment has the potential to refine measures of earnings management and mitigate the mixed inferences made from these measures in the literature. Hence, this study contributes to the literature by augmenting accrual-based earnings management models with governance and contextual mechanisms.
Article III examines the role of managerial traits in the active management of capital structure within the boundaries of a system of financial and governance constraints. The findings of this article show that the managerial discretionary index as a measure of managerial traits is associated with leverage growth and the satisficing effect is statistically significant. The results also show that the association is nonlinear under some combinations of financial and governance constraints (relatively low and high constraints), and linear in others.