This study reexamines: (1) factors that drive or discourage firms to undertake institutional buyouts (IBOs) and management buyouts (MBOs), and (2) these firms’ pre-buyout earnings management (EM) behavior. The results show that undervaluation and takeover threats drive firms to conduct MBOs, while a high percentage of outside directors tend to block the MBO proposal. In addition, except for size and book-to-market (BM) ratio, no variable significantly affects firms’ tendency to conduct IBOs, revealing that determinants of IBOs vary over time or are unobserved. Further, IBO and MBO firms slightly and aggressively understate their earnings, respectively. IBO firms with high free cash flows and high BM ratios (low growth opportunities) and MBO firms with takeover threats tend to deflate earnings, the former doing so to attract institutions to bid on them and the latter to buy their firms at relatively low prices. These results imply that institutions undertake IBOs due to their ability to create values by post-buyout actions, rather than by undervaluation recovery or corporate governance restructuring. Finally, firms conduct MBOs to capture their pre-buyout undervaluation, a practice that partly arises from managerial EM.