Do university spin-offs manage earnings differently? Analysing the role of academic affiliation

This study examines how academic affiliation influences earnings management (EM) in university spin-offs (USOs). Using a sample of 1,482 Italian USOs (2014–2022), we apply Propensity Score Matching (PSM) and Stubben’s (2010. ‘Discretionary Revenues as a Measure of Earnings Management’. The Accounting Review 85 (2): 695–717. doi:10.2308/accr.2010.85.2.695) conditional revenue model to compare them with non-academic innovative start-ups. Results show that USOs engage in significantly lower EM, suggesting that academic governance fosters transparency and enhances their credibility and investment appeal. Reduced manipulation of financial statements appears to be a strategic asset, improving access to capital and competitiveness. These findings highlight the policy relevance of ethical financial governance and provide guidance for universities and policymakers seeking to strengthen accountability in innovation-driven academic ventures.