China Journal of Accounting Research最新文献

This paper explores the influence of the State Capital Investing and Operating Company (SCIOC) pilot reform on SOE bailout using a staggered difference-in-differences model. Based on a sample of listed SOEs during 2011–2018, we find that when the real controllers of listed SOEs enter the list of SCIOCs, soft budget constraints are alleviated and listed subsidiaries are less likely to become distressed. Mechanism tests indicate that SCIOCs help distressed firms through exiting the market, reducing bank loans, enhancing corporate governance, and improving operating efficiency. Heterogeneity tests show that the effect of SCIOC establishment is more significant in central and western regions, in public welfare and special function industries, for central SCIOCs, for state capital investing companies, when firms are organized in more layers, and for firms that engage in M&As. The empirical results show that the implementation of SCIOCs benefits both micro-enterprise development and state capital layout optimization.

As a highly disruptive digital technology, blockchain provides new solutions for reshaping corporate governance mechanisms and improving resource allocation. We empirically examine the relationship between blockchain and corporate investment inefficiency. We find that blockchain can help improve corporate investment efficiency, and this result is valid after a series of robustness tests. Blockchain can not only significantly restrain overinvestment but also alleviate underinvestment. Reducing financing costs and alleviating agency conflicts are the two channels through which blockchain is associated with corporate investment efficiency, and financial reporting quality is the condition on which the channels depend. When the CEO holds few shares or the trade credit environment in the region where the company is located is poor, the effect of blockchain is more prominent than it is otherwise. Investment efficiency cannot be improved by blockchain for companies providing blockchain products or services to customers, only for those promoting their own operations and management with blockchain. Ultimately, blockchain can enhance companies’ value by alleviating inefficient investment. We reveal the role of blockchain in corporate investment efficiency, furnish microeconomic evidence for the integration of digital technology and the real economy and provide implications for China to promote digital technology to drive high-quality company development.

We examine whether management earnings forecasts (MEFs) help reduce the stock return seasonality associated with earnings seasonality around earnings announcements (EAs) in Chinese A-share markets. We find that firms in historically low earnings seasons outperform firms in high earnings seasons by 2.1% around MEFs. Firms in low earnings seasons also have higher trading volume and return volatility than their counterparts around EAs and MEFs. MEFs significantly reduce the ability of historical seasonal earnings rankings to negatively predict announcement returns, volume and volatility around EAs. The reduction effects are stronger when MEFs are voluntary or made closer to EAs. The evidence suggests that MEFs facilitate the correction of investors’ tendency to extrapolate earnings seasonality and its resulted stock mispricing.

With the advent of the new media era, government social media have become an important paradigm for social governance. We perform a large-sample regression and reveal that the higher the quality of taxation bureaus’ operation of government social media, the lower the degree of local enterprises’ tax avoidance, which works through reducing tax avoidance incentives and increasing the difficulty of committing tax avoidance. Moreover, government social media play a substitution effect on tax enforcement and administration. We also find that government social media should focus on strengthening its official, formal and professional characteristics. Given the significant recent changes in how enterprises handle taxation, the proportion of information that taxation bureaus post on system operation should be appropriately increased.

We use a quasi-natural experiment wherein the Shanghai Stock Exchange requires listed companies in certain industries to disclose operational information and a staggered difference-in-differences model to examine the impact of mandatory information disclosure on corporate innovation. We find that companies subject to mandatory operational information disclosure show significantly increased innovation. This effect is pronounced for companies classified as non-state-owned enterprises, facing severe financing constraints and a high degree of shareholder tunneling behavior and in competitive and high-tech industries. Although mandatory operational information disclosure reduces their competitive advantage, companies appear to compensate by increasing innovation. Our study highlights the positive impact of mandatory operational information disclosure, indicating that it contributes to the high-quality development of both capital markets and companies.

The modernization theory forecasts a sharp declining effect of institutionalized religion on human behavior owing to the extensive economic development. However, this prediction is rejected and proved that religious values and beliefs have a pervasive influence on individual conduct. Based on this salient evidence, we examine the influence of religious social norms on bank earnings management behavior with regard to ongoing economic development. We use 20,715 bank-year observations from 1318 listed banks of eight geographical regions. We, further, employ an updated dataset of 2007–2021 to resemble the economic prosperity time period. Our study discards the prediction of the modernization theory and reveals that banks located in countries with high religiosity are less likely to manage their reported earnings. While comparing conventional banks with Islamic ones, conventional banks are found to be less prone to the earnings management practice than that of their Islamic counterparts. We also find religiosity to have a greater magnitude of effect on the accounting manipulation in the crisis period than in the post-crisis one. The cross-regional differences in religious values bring differential effects on this unethical practice. Our results are robust with the alternative measures of earnings management and alternative model specifications.

We examine the impact of Confucian philosophy on external pay gaps, and find that a Confucianist atmosphere is negatively associated with firms’ external pay gaps for both executives and employees. Mechanistically, the Confucian concept of “righteousness” reduces the self-interested motivation of management, in turn reducing executives’ external pay gap; “humaneness” causes management to focus on protecting employees’ rights and interests, benefiting employees’ compensation; and “honesty” improves information disclosure, reducing the external compensation gap for both executives and general employees. The inhibitory effect of Confucian culture on the external pay gap is greater in regions with weak formal institutions and non-state-owned firms, while foreign cultural shocks attenuate the Confucian influence. Finally, the Confucian culture-driven reduction of the external pay gap improves enterprises’ economic efficiency.

We test whether differences in the background characteristics of firms’ chairperson and CEO can reduce management agency costs. We find that when the chairperson is older, has a higher level of education, and has more overseas experience than the CEO, the management agency costs will be lower. A series of robustness tests do not change our conclusions. In further analysis, we find that the negative relationship between the two is more significant for SOEs or firms experiencing fierce market competition. Finally, we also find that the chairman-CEO’s vertical dyad background characteristics differences can help to improve firm performance. Our study provides theoretical and practical implications for companies on how to best configure their top management team.

Using self-made billionaire entrepreneurs in China as a proxy for large entrepreneurs, we examine the impact of institutional environment quality on the longevity of such entrepreneurs. While property rights institutions and contracting institutions are important in explaining macroeconomic growth and small firm growth, we find no evidence that they matter to the longevity of billionaire entrepreneurs. However, we find access to finance to be important to the longevity of billionaire entrepreneurs. Our results help better understand the relative importance of various institutional environment forces to the continuous success of billionaire entrepreneurs.

We investigate the effect of Confucian culture on corporate bond pricing. Using the birthplace data of 56,759 Jinshi in the Ming and Qing dynasties to construct a proxy of Confucian culture, we find a significantly negative relation between Confucian culture and bond pricing: the stronger the Confucian atmosphere of the corporate headquarters’ location, the higher the bond rating and the lower the credit spread. This conclusion still holds after using the distance to the nearest ancient printing office as an instrumental variable and a series of robustness tests. The mechanism test shows that Confucian culture can improve the pricing efficiency of corporate bonds by fostering investors’ trust, alleviating principal–agent problems and restraining bad corporate behaviors. Moreover, the impact of Confucian culture on corporate bond pricing is greater for firms located in regions with weak legal and other formal institutional constraints and for unlisted companies. Our study complements the literature on culture and bond pricing, and provides policy insights from traditional Chinese wisdom for improving the efficiency of financial markets.