當一公司之公司治理不佳時，內部經理人可能操縱盈餘管理，對外部投資者隱藏私益。這觀點是認為普遍性的盈餘管理是用來增加私人控制利益及降低對外部投資者的保護。本篇利用2002年至2007年間的九個國家，一共68,523個樣本，檢視是否外資易投資於公司治理較佳的公司，我們發現公司治理較優的公司傾向利用盈餘管理對外傳達並溝通內部資訊，而非欺瞞外部股東。

When the corporation is poorly governed, insiders could use earnings management to conceal firm performance from outsiders. This insight suggests that the pervasiveness of earnings management is increasing in private control benefits and decreasing in outside investor protection. We study 68,523 firms from 9 countries in the period 2002 though 2007 to examine whether foreign investors are more likely to invest in well-governed firms. We find that foreigners tend to invest in firms that undertake earnings management to communicate their private information rather than use it to mislead outside shareholders.

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