Pub Date : 2025-06-01Epub Date: 2025-03-08DOI: 10.1016/j.cjar.2025.100406
Jinxuan Zhao , Meixu Ren
How culture affects banks’ digital transformation (BDT) is understudied. We discover that clan culture inhibits BDT in China. Clan culture’s short-radius trust requires banks to have more physical branches and employees to establish trust, and its risk aversion reduces banks’ willingness to bear risks, inhibiting BDT. Resource pooling within clans attenuates the financing constraints and reduces the credit demand of enterprises; households seek more credit through informal channels, limiting their reliance on bank loans and inhibiting BDT from the demand side. Developing the institutional environment and generalized trust as well as demographic change can attenuate these negative effects. Overall, we clarify how informal institutional factors inhibit BDT, enriching research on clan culture and modern financial development.
{"title":"Innovative or conservative? How clan culture shapes bank digital transformation in China","authors":"Jinxuan Zhao , Meixu Ren","doi":"10.1016/j.cjar.2025.100406","DOIUrl":"10.1016/j.cjar.2025.100406","url":null,"abstract":"<div><div>How culture affects banks’ digital transformation (BDT) is understudied. We discover that clan culture inhibits BDT in China. Clan culture’s short-radius trust requires banks to have more physical branches and employees to establish trust, and its risk aversion reduces banks’ willingness to bear risks, inhibiting BDT. Resource pooling within clans attenuates the financing constraints and reduces the credit demand of enterprises; households seek more credit through informal channels, limiting their reliance on bank loans and inhibiting BDT from the demand side. Developing the institutional environment and generalized trust as well as demographic change can attenuate these negative effects. Overall, we clarify how informal institutional factors inhibit BDT, enriching research on clan culture and modern financial development.</div></div>","PeriodicalId":45688,"journal":{"name":"China Journal of Accounting Research","volume":"18 2","pages":"Article 100406"},"PeriodicalIF":1.9,"publicationDate":"2025-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143937786","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-06-01Epub Date: 2025-03-19DOI: 10.1016/j.cjar.2025.100415
Rongjiang Bao , Yi Quan , Yuan Sun , Jingwen Zhang
The mandatory rotation of independent directors upon the expiration of their term is a key institutional design in China, aimed at safeguarding their independence and enhancing the effectiveness of their supervision. However, whether reappointing these directors after a “cooling-off period” following mandatory rotation undermines the effectiveness of supervision remains an open question. We investigate whether independent directors can effectively monitor tunneling activities after their reappointment. We find that their monitoring is less effective during their reappointment term than in their first term, reflected in a significant increase in related-party transactions with controlling shareholders. A mechanism test reveals that independent directors’ monitoring behavior is more passive during the reappointment term, as evidenced by less dissent and a lower likelihood of challenging proposals related to controlling shareholders. These effects are more pronounced when reappointed independent directors are less willing or able to supervise, or when the company’s internal and external governance environment is poor. Supervision also appears to be more effective if they are reappointed after a cooling-off period of more than three years. This paper extends research on the governance impact of reappointed independent directors and provides empirical evidence that can help to improve their post-term management practices.
{"title":"Can independent directors effectively monitor controlling shareholders after reappointment?","authors":"Rongjiang Bao , Yi Quan , Yuan Sun , Jingwen Zhang","doi":"10.1016/j.cjar.2025.100415","DOIUrl":"10.1016/j.cjar.2025.100415","url":null,"abstract":"<div><div>The mandatory rotation of independent directors upon the expiration of their term is a key institutional design in China, aimed at safeguarding their independence and enhancing the effectiveness of their supervision. However, whether reappointing these directors after a “cooling-off period” following mandatory rotation undermines the effectiveness of supervision remains an open question. We investigate whether independent directors can effectively monitor tunneling activities after their reappointment. We find that their monitoring is less effective during their reappointment term than in their first term, reflected in a significant increase in related-party transactions with controlling shareholders. A mechanism test reveals that independent directors’ monitoring behavior is more passive during the reappointment term, as evidenced by less dissent and a lower likelihood of challenging proposals related to controlling shareholders. These effects are more pronounced when reappointed independent directors are less willing or able to supervise, or when the company’s internal and external governance environment is poor. Supervision also appears to be more effective if they are reappointed after a cooling-off period of more than three years. This paper extends research on the governance impact of reappointed independent directors and provides empirical evidence that can help to improve their post-term management practices.</div></div>","PeriodicalId":45688,"journal":{"name":"China Journal of Accounting Research","volume":"18 2","pages":"Article 100415"},"PeriodicalIF":1.9,"publicationDate":"2025-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143937787","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-06-01Epub Date: 2025-03-05DOI: 10.1016/j.cjar.2025.100408
Huiyang Zhou, Jian Chu
Regulatory information disclosure is an important measure to enhance government transparency and law enforcement credibility. Studies mainly focus on ex-post disclosure and affirm its positive effects. However, ex-ante disclosure of regulatory information, as a representative regulatory policy, not only receives little attention in research but also is highly controversial in practice. This paper leverages the differential timing of disclosure of on-site inspections by the China Securities Regulatory Commission as the research setting to examine the impact of ex-ante disclosure of regulatory information on the governance of regulated listed companies. We find that ex-ante disclosure of regulatory information does not weaken the regulatory effect as expected, but rather enhances the governance of listed companies, as evidenced by the improvement of internal control quality. Mechanism analysis shows that ex-ante disclosure of regulatory information can stimulate shareholder activism and motivate investors to participate in corporate governance activities by exercising their rights and voicing their opinions, which in turn improves corporate governance. In addition, the heterogeneity test finds that regulatory capture induced by political connections weakens the governance effect of ex-ante disclosure of regulatory information. The economic consequence test shows that ex-ante disclosure of regulatory information reduces corporate violations and improves firm performance. Our findings suggest that ex-ante disclosure of regulatory information can mobilize investors, especially minority shareholders, to participate in corporate governance and promote the high-quality development of listed companies in a market-oriented way. Meanwhile, the institutional cost of regulatory capture stemming from ex-ante disclosure must be watchfully monitored.
{"title":"Does ex-ante disclosure of regulatory information really backfire?","authors":"Huiyang Zhou, Jian Chu","doi":"10.1016/j.cjar.2025.100408","DOIUrl":"10.1016/j.cjar.2025.100408","url":null,"abstract":"<div><div>Regulatory information disclosure is an important measure to enhance government transparency and law enforcement credibility. Studies mainly focus on ex-post disclosure and affirm its positive effects. However, ex-ante disclosure of regulatory information, as a representative regulatory policy, not only receives little attention in research but also is highly controversial in practice. This paper leverages the differential timing of disclosure of on-site inspections by the China Securities Regulatory Commission as the research setting to examine the impact of ex-ante disclosure of regulatory information on the governance of regulated listed companies. We find that ex-ante disclosure of regulatory information does not weaken the regulatory effect as expected, but rather enhances the governance of listed companies, as evidenced by the improvement of internal control quality. Mechanism analysis shows that ex-ante disclosure of regulatory information can stimulate shareholder activism and motivate investors to participate in corporate governance activities by exercising their rights and voicing their opinions, which in turn improves corporate governance. In addition, the heterogeneity test finds that regulatory capture induced by political connections weakens the governance effect of ex-ante disclosure of regulatory information. The economic consequence test shows that ex-ante disclosure of regulatory information reduces corporate violations and improves firm performance. Our findings suggest that ex-ante disclosure of regulatory information can mobilize investors, especially minority shareholders, to participate in corporate governance and promote the high-quality development of listed companies in a market-oriented way. Meanwhile, the institutional cost of regulatory capture stemming from ex-ante disclosure must be watchfully monitored.</div></div>","PeriodicalId":45688,"journal":{"name":"China Journal of Accounting Research","volume":"18 2","pages":"Article 100408"},"PeriodicalIF":1.9,"publicationDate":"2025-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143937784","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-06-01Epub Date: 2025-03-24DOI: 10.1016/j.cjar.2025.100416
Fang Wang , Xinci Chen , Guochao Yang
Many public–private partnership (PPP) projects in China are facing increased fiscal expenditure responsibilities and weakened fiscal capacity, which may hinder investment in corporate innovation. Using data from Chinese prefecture-level cities and listed firms from 2014 to 2020, we find that PPP fiscal expenditure responsibilities negatively affect firms’ current and future innovation investment by reducing government subsidies and increasing corporate taxes. This negative effect is more pronounced when PPP fiscal expenditure responsibilities exceed a certain threshold. It is also stronger when local governments have higher levels of debt and lower central transfer payments. The effect is also stronger if the PPP project’s return mechanism increases the government’s future fiscal expenditure responsibilities, but weaker if the project’s operating model revitalizes government assets. The effect on private firms, small firms, high-debt firms, and firms facing strong financing constraints is more pronounced. From the perspective of fiscal capacity, this paper explains the underlying reasons why the effectiveness of government support policies for corporate innovation varies. Additionally, it examines the negative impacts of the financing-oriented PPP model on corporate innovation investment, providing empirical evidence to support options for optimal PPP strategies.
{"title":"Fiscal expenditure responsibilities of public–private partnerships and corporate innovation investment—evidence from prefecture-level cities in China","authors":"Fang Wang , Xinci Chen , Guochao Yang","doi":"10.1016/j.cjar.2025.100416","DOIUrl":"10.1016/j.cjar.2025.100416","url":null,"abstract":"<div><div>Many public–private partnership (PPP) projects in China are facing increased fiscal expenditure responsibilities and weakened fiscal capacity, which may hinder investment in corporate innovation. Using data from Chinese prefecture-level cities and listed firms from 2014 to 2020, we find that PPP fiscal expenditure responsibilities negatively affect firms’ current and future innovation investment by reducing government subsidies and increasing corporate taxes. This negative effect is more pronounced when PPP fiscal expenditure responsibilities exceed a certain threshold. It is also stronger when local governments have higher levels of debt and lower central transfer payments. The effect is also stronger if the PPP project’s return mechanism increases the government’s future fiscal expenditure responsibilities, but weaker if the project’s operating model revitalizes government assets. The effect on private firms, small firms, high-debt firms, and firms facing strong financing constraints is more pronounced. From the perspective of fiscal capacity, this paper explains the underlying reasons why the effectiveness of government support policies for corporate innovation varies. Additionally, it examines the negative impacts of the financing-oriented PPP model on corporate innovation investment, providing empirical evidence to support options for optimal PPP strategies.</div></div>","PeriodicalId":45688,"journal":{"name":"China Journal of Accounting Research","volume":"18 2","pages":"Article 100416"},"PeriodicalIF":1.9,"publicationDate":"2025-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143937783","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-06-01Epub Date: 2025-04-30DOI: 10.1016/j.cjar.2025.100421
Shangkun Liang , Sichao Wang , Kaijuan Gao
Using a sample of listed Chinese firms from 2007 to 2020, we investigate the governance implications of cross-ownership in corporate bond markets. We find that cross-ownership significantly reduces bond issuance spreads, suggesting that synergistic governance effects outweigh potential collusion risks. This effect operates through two channels: reducing information asymmetry between shareholders and creditors and lowering firm risk. The effect is stronger when cross-owners hold shares in more peer firms and retain shares longer but weaker for state-owned enterprises, long-term bonds and firms with robust information intermediaries. Our findings contribute to the corporate governance literature by demonstrating how cross-ownership enhances creditor protection, providing insights into optimizing ownership structures for debt financing, particularly in emerging markets with inadequate institutional monitoring.
{"title":"Cross-owners and bond issue pricing: coordination or collusion?","authors":"Shangkun Liang , Sichao Wang , Kaijuan Gao","doi":"10.1016/j.cjar.2025.100421","DOIUrl":"10.1016/j.cjar.2025.100421","url":null,"abstract":"<div><div>Using a sample of listed Chinese firms from 2007 to 2020, we investigate the governance implications of cross-ownership in corporate bond markets. We find that cross-ownership significantly reduces bond issuance spreads, suggesting that synergistic governance effects outweigh potential collusion risks. This effect operates through two channels: reducing information asymmetry between shareholders and creditors and lowering firm risk. The effect is stronger when cross-owners hold shares in more peer firms and retain shares longer but weaker for state-owned enterprises, long-term bonds and firms with robust information intermediaries. Our findings contribute to the corporate governance literature by demonstrating how cross-ownership enhances creditor protection, providing insights into optimizing ownership structures for debt financing, particularly in emerging markets with inadequate institutional monitoring.</div></div>","PeriodicalId":45688,"journal":{"name":"China Journal of Accounting Research","volume":"18 2","pages":"Article 100421"},"PeriodicalIF":1.9,"publicationDate":"2025-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143937782","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-06-01Epub Date: 2025-04-29DOI: 10.1016/j.cjar.2025.100420
Yanan Tian , Yuhui Wu , Yun Zhang , Zhilun Zhang
Carbon information disclosure is crucial for combating climate change, but firms often face cost and market constraints that limit their willingness to disclose. We focus on green underwriters as financial intermediaries to examine their influence on corporate carbon information disclosure. We find that green underwriters significantly improve disclosure levels through information and monitoring effects. Cross-sectional analyses reveal that this positive association is more pronounced among firms with close underwriting relationships, high-carbon firms and environmentally friendly firms. Furthermore, we rule out collusion between underwriters and issuers, showing that green underwriters reduce proprietary costs while increasing market share and recognition from green funds. Our research highlights the monitor role of green financial intermediaries in promoting carbon disclosure and introduces new applications for textual analysis in this area.
{"title":"Green underwriters and carbon information disclosure","authors":"Yanan Tian , Yuhui Wu , Yun Zhang , Zhilun Zhang","doi":"10.1016/j.cjar.2025.100420","DOIUrl":"10.1016/j.cjar.2025.100420","url":null,"abstract":"<div><div>Carbon information disclosure is crucial for combating climate change, but firms often face cost and market constraints that limit their willingness to disclose. We focus on green underwriters as financial intermediaries to examine their influence on corporate carbon information disclosure. We find that green underwriters significantly improve disclosure levels through information and monitoring effects. Cross-sectional analyses reveal that this positive association is more pronounced among firms with close underwriting relationships, high-carbon firms and environmentally friendly firms. Furthermore, we rule out collusion between underwriters and issuers, showing that green underwriters reduce proprietary costs while increasing market share and recognition from green funds. Our research highlights the monitor role of green financial intermediaries in promoting carbon disclosure and introduces new applications for textual analysis in this area.</div></div>","PeriodicalId":45688,"journal":{"name":"China Journal of Accounting Research","volume":"18 2","pages":"Article 100420"},"PeriodicalIF":1.9,"publicationDate":"2025-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143937785","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-06-01Epub Date: 2025-04-10DOI: 10.1016/j.cjar.2025.100419
Yanan Wang , Shuai Wang , Dongmin Kong , Cheng Xue
Research on government procurement emphasizes its positive impacts, while paying insufficient attention to the risks posed by government arrears. We show that the implementation of China’s Special Supervision Action for Repaying Government Arrears significantly enhances employee treatment, particularly safety management and employee incentives, through monetary compensation, welfare, social security expenditure and investment in skilled human capital. The Special Supervision Action improves employee treatment by alleviating liquidity constraints and enhancing CEO confidence, which in turn boost firm productivity and performance. Cross-sectional tests indicate that the number of nearby bank branches, political connections, financial health, demand for human capital and external job opportunities affect these relationships. Our findings highlight the influence of government arrears repayment on corporate human capital investment.
{"title":"Refining employee treatment: Effects of government arrears repayment in China","authors":"Yanan Wang , Shuai Wang , Dongmin Kong , Cheng Xue","doi":"10.1016/j.cjar.2025.100419","DOIUrl":"10.1016/j.cjar.2025.100419","url":null,"abstract":"<div><div>Research on government procurement emphasizes its positive impacts, while paying insufficient attention to the risks posed by government arrears. We show that the implementation of China’s Special Supervision Action for Repaying Government Arrears significantly enhances employee treatment, particularly safety management and employee incentives, through monetary compensation, welfare, social security expenditure and investment in skilled human capital. The Special Supervision Action improves employee treatment by alleviating liquidity constraints and enhancing CEO confidence, which in turn boost firm productivity and performance. Cross-sectional tests indicate that the number of nearby bank branches, political connections, financial health, demand for human capital and external job opportunities affect these relationships. Our findings highlight the influence of government arrears repayment on corporate human capital investment.</div></div>","PeriodicalId":45688,"journal":{"name":"China Journal of Accounting Research","volume":"18 2","pages":"Article 100419"},"PeriodicalIF":1.9,"publicationDate":"2025-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143937805","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-01Epub Date: 2025-01-21DOI: 10.1016/j.cjar.2024.100404
Yong Huang , Kam C. Chan , Chunxiang Zhao
We investigate the impact of tax-related human capital (THC) on corporate financial reporting aggressiveness. Using the presence of former or current tax officers from tax authorities on a firm’s board of directors as a proxy for THC, we find that firms with tax officer directors report their earnings more aggressively than those without such directors. This relationship remains robust across alternative measures of aggressiveness, model specifications and various methods of addressing endogeneity concerns. Moreover, the level of aggressiveness is more pronounced when tax officer directors have previously served in local tax authorities, have experience in offices overseeing the firm’s income tax affairs or have held a senior position in tax authorities, particularly when firms are subject to lenient tax enforcement policies or higher statutory tax rates. These findings support that tax officer directors contribute to firms’ aggressive reporting practices through THC. Additional analyses suggest that firms with tax officer directors exhibit lower effective tax rates and a weaker association between effective tax rates and operating cash flows. Our findings collectively demonstrate that firms with tax officer directors possess significant THC and employ aggressive strategies in both financial and tax reporting practices.
{"title":"Tax-related human capital: Evidence from financial reporting aggressiveness of boards with tax officer directors in China","authors":"Yong Huang , Kam C. Chan , Chunxiang Zhao","doi":"10.1016/j.cjar.2024.100404","DOIUrl":"10.1016/j.cjar.2024.100404","url":null,"abstract":"<div><div>We investigate the impact of tax-related human capital (THC) on corporate financial reporting aggressiveness. Using the presence of former or current tax officers from tax authorities on a firm’s board of directors as a proxy for THC, we find that firms with tax officer directors report their earnings more aggressively than those without such directors. This relationship remains robust across alternative measures of aggressiveness, model specifications and various methods of addressing endogeneity concerns. Moreover, the level of aggressiveness is more pronounced when tax officer directors have previously served in local tax authorities, have experience in offices overseeing the firm’s income tax affairs or have held a senior position in tax authorities, particularly when firms are subject to lenient tax enforcement policies or higher statutory tax rates. These findings support that tax officer directors contribute to firms’ aggressive reporting practices through THC. Additional analyses suggest that firms with tax officer directors exhibit lower effective tax rates and a weaker association between effective tax rates and operating cash flows. Our findings collectively demonstrate that firms with tax officer directors possess significant THC and employ aggressive strategies in both financial and tax reporting practices.</div></div>","PeriodicalId":45688,"journal":{"name":"China Journal of Accounting Research","volume":"18 1","pages":"Article 100404"},"PeriodicalIF":1.9,"publicationDate":"2025-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143593319","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-01Epub Date: 2024-09-30DOI: 10.1016/j.cjar.2024.100394
Yuanyuan Liu, Guojian Zheng, Guilong Cai
In the context of differentiated governance and the deepening market-oriented reform of compensation in China, we divide state-owned enterprises (SOEs) into four categories according to their equity structure, namely absolute holding firms, relative holding firms, major impact firms and equity participation firms, to examine the current situation and effectiveness of differentiated governance for executive compensation. We report four main findings. First, executive compensation levels, compensation gaps and equity incentives increase as government control decreases, indicating the emergence of differentiated governance of executive compensation in SOEs. Second, the driving force behind differentiated compensation is the government’s willingness to intervene in SOEs. The government’s ability to intervene in SOEs is not diminished by reduced equity control, and the government may even compensate for such a reduction by appointing excess executives. Third, differentiated governance of compensation is more prominent in local and competitive SOEs, while equity incentives lag significantly behind salary levels and salary gap incentives. Fourth, differentiated governance of compensation levels and gaps are effective in reducing agency problems and enhancing innovation in SOEs; however, the impact of equity incentives is limited. These findings enrich the literature on the differentiated governance of SOEs and facilitate a more comprehensive understanding of executive incentive and compensation contracts in Chinese SOEs.
{"title":"Differentiated governance of executive compensation in Chinese state-owned enterprises","authors":"Yuanyuan Liu, Guojian Zheng, Guilong Cai","doi":"10.1016/j.cjar.2024.100394","DOIUrl":"10.1016/j.cjar.2024.100394","url":null,"abstract":"<div><div>In the context of differentiated governance and the deepening market-oriented reform of compensation in China, we divide state-owned enterprises (SOEs) into four categories according to their equity structure, namely absolute holding firms, relative holding firms, major impact firms and equity participation firms, to examine the current situation and effectiveness of differentiated governance for executive compensation. We report four main findings. First, executive compensation levels, compensation gaps and equity incentives increase as government control decreases, indicating the emergence of differentiated governance of executive compensation in SOEs. Second, the driving force behind differentiated compensation is the government’s willingness to intervene in SOEs. The government’s ability to intervene in SOEs is not diminished by reduced equity control, and the government may even compensate for such a reduction by appointing excess executives. Third, differentiated governance of compensation is more prominent in local and competitive SOEs, while equity incentives lag significantly behind salary levels and salary gap incentives. Fourth, differentiated governance of compensation levels and gaps are effective in reducing agency problems and enhancing innovation in SOEs; however, the impact of equity incentives is limited. These findings enrich the literature on the differentiated governance of SOEs and facilitate a more comprehensive understanding of executive incentive and compensation contracts in Chinese SOEs.</div></div>","PeriodicalId":45688,"journal":{"name":"China Journal of Accounting Research","volume":"18 1","pages":"Article 100394"},"PeriodicalIF":1.9,"publicationDate":"2025-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143593325","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-01Epub Date: 2025-02-19DOI: 10.1016/j.cjar.2024.100376
Ning Chen , Junxiong Fang
Corporate online sales data are embedded with high informational value. Focusing on auditors who are concerned about information quality, this paper systematically tests the governance effect of releasing third-party online sales data on audit quality. Using the first aggregate release of online sales data in 2018 as an exogenous shock, we use the difference-in-differences model and empirically demonstrate that the audit quality of firms with released online sales data improves significantly after 2018. Subsequent analyses demonstrate that releasing online sales data has a governance effect by improving internal control quality, audit efficiency and audit prudence. The findings demonstrate that the aggregate release of third-party online sales data could have positive economic consequences.
{"title":"The aggregate release of third-party online sales data and audit quality improvement","authors":"Ning Chen , Junxiong Fang","doi":"10.1016/j.cjar.2024.100376","DOIUrl":"10.1016/j.cjar.2024.100376","url":null,"abstract":"<div><div>Corporate online sales data are embedded with high informational value. Focusing on auditors who are concerned about information quality, this paper systematically tests the governance effect of releasing third-party online sales data on audit quality. Using the first aggregate release of online sales data in 2018 as an exogenous shock, we use the difference-in-differences model and empirically demonstrate that the audit quality of firms with released online sales data improves significantly after 2018. Subsequent analyses demonstrate that releasing online sales data has a governance effect by improving internal control quality, audit efficiency and audit prudence. The findings demonstrate that the aggregate release of third-party online sales data could have positive economic consequences.</div></div>","PeriodicalId":45688,"journal":{"name":"China Journal of Accounting Research","volume":"18 1","pages":"Article 100376"},"PeriodicalIF":1.9,"publicationDate":"2025-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143593320","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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