Pub Date : 2025-12-01Epub Date: 2025-06-26DOI: 10.1016/j.jcae.2025.100489
Shih-Chu Chou , Sunay Mutlu , Weiwei Wang
We investigate the association between analysts’ revenue forecast coverage and firms’ revenue manipulation. We find that coverage of revenues by financial analysts relative to earnings is positively associated with the magnitude of firms’ discretionary revenues. This finding shows a pressure effect of analysts, where analysts’ revenue forecasts induce incentives for managers to manipulate revenues to meet expectations. Our cross-sectional analyses show that this pressure on discretionary revenues is higher during the fourth fiscal quarter. This effect is also more pronounced for firms whose revenues are more value-relevant and when analysts exhibit greater disagreement over revenue forecasts. Further evidence related to ASC 606, a major GAAP change about revenue accounting, provides corroborating evidence for the pressure effect. Robustness checks confirm the validity of our findings and offer further insights into the role of revenue forecasts in revenue manipulation.
{"title":"Analysts’ revenue forecasts and discretionary revenues","authors":"Shih-Chu Chou , Sunay Mutlu , Weiwei Wang","doi":"10.1016/j.jcae.2025.100489","DOIUrl":"10.1016/j.jcae.2025.100489","url":null,"abstract":"<div><div>We investigate the association between analysts’ revenue forecast coverage and firms’ revenue manipulation. We find that coverage of revenues by financial analysts relative to earnings is positively associated with the magnitude of firms’ discretionary revenues. This finding shows a pressure effect of analysts, where analysts’ revenue forecasts induce incentives for managers to manipulate revenues to meet expectations. Our cross-sectional analyses show that this pressure on discretionary revenues is higher during the fourth fiscal quarter. This effect is also more pronounced for firms whose revenues are more value-relevant and when analysts exhibit greater disagreement over revenue forecasts. Further evidence related to ASC 606, a major GAAP change about revenue accounting, provides corroborating evidence for the pressure effect. Robustness checks confirm the validity of our findings and offer further insights into the role of revenue forecasts in revenue manipulation.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 3","pages":"Article 100489"},"PeriodicalIF":2.9,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144511094","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-08-01Epub Date: 2025-05-11DOI: 10.1016/j.jcae.2025.100474
Sabrina Gong , Heather A. Wier
We examine whether classification shifting affects measured cost stickiness. Our evidence is consistent with managers shifting SG&A costs into the restructuring charge category in instances where they are targeting “Street” earnings to meet or beat the analysts’ consensus forecast. Consequently, SG&A costs appear less sticky. We confirm that the decrease in observed cost stickiness for firms we identify as classification shifters is not due to increased operational efficiency and is incremental to spending cuts. We demonstrate that one-year ahead market share for firms that likely cut SG&A spending decreases significantly compared to the market share of firms that we identify as classification shifters. We present evidence that classification shifting via restructuring charges is concentrated in industries where SG&A spending creates high future value.
{"title":"An examination of the effect of classification shifting on the perception of cost stickiness","authors":"Sabrina Gong , Heather A. Wier","doi":"10.1016/j.jcae.2025.100474","DOIUrl":"10.1016/j.jcae.2025.100474","url":null,"abstract":"<div><div>We examine whether classification shifting affects measured cost stickiness. Our evidence is consistent with managers shifting SG&A costs into the restructuring charge category in instances where they are targeting “Street” earnings to meet or beat the analysts’ consensus forecast. Consequently, SG&A costs appear less sticky. We confirm that the decrease in observed cost stickiness for firms we identify as classification shifters is not due to increased operational efficiency and is incremental to spending cuts. We demonstrate that one-year ahead market share for firms that likely cut SG&A spending decreases significantly compared to the market share of firms that we identify as classification shifters. We present evidence that classification shifting via restructuring charges is concentrated in industries where SG&A spending creates high future value.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 2","pages":"Article 100474"},"PeriodicalIF":2.9,"publicationDate":"2025-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144071179","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-08-01Epub Date: 2025-05-15DOI: 10.1016/j.jcae.2025.100475
Hui Liang James , Pornsit Jiraporn , Hongxia Wang
We examine the impact of CEO tenure on corporate labor investment efficiency. While some studies show that CEO entrenchment increases in tenure (e.g., Hermalin and Weisbach, 1998), others argue that managerial expertise builds over time in the office (e.g., Graf-Vlachy et al., 2020). Using a large sample of U.S. firms from 1992 to 2018, we find that longer-tenured CEOs are associated with more efficient labor investment. This finding is robust to alternative measures of labor investment inefficiency, subsample analyses, and various model specifications. Further analysis shows that longer-tenured CEOs mitigate both under- and over-investment in labor problems characterized by under-hiring and under-firing, respectively. The positive effect of CEO tenure on labor investment efficiency is stronger in human capital-intensive firms and those with greater operational uncertainty. We conclude that advanced managerial expertise enables longer-tenured CEOs to invest in labor more accurately.
{"title":"CEO tenure and labor investment efficiency","authors":"Hui Liang James , Pornsit Jiraporn , Hongxia Wang","doi":"10.1016/j.jcae.2025.100475","DOIUrl":"10.1016/j.jcae.2025.100475","url":null,"abstract":"<div><div>We examine the impact of CEO tenure on corporate labor investment efficiency. While some studies show that CEO entrenchment increases in tenure (e.g., <span><span>Hermalin and Weisbach, 1998</span></span>), others argue that managerial expertise builds over time in the office (e.g., <span><span>Graf-Vlachy et al., 2020</span></span>). Using a large sample of U.S. firms from 1992 to 2018, we find that longer-tenured CEOs are associated with more efficient labor investment. This finding is robust to alternative measures of labor investment inefficiency, subsample analyses, and various model specifications. Further analysis shows that longer-tenured CEOs mitigate both under- and over-investment in labor problems characterized by under-hiring and under-firing, respectively. The positive effect of CEO tenure on labor investment efficiency is stronger in human capital-intensive firms and those with greater operational uncertainty. We conclude that advanced managerial expertise enables longer-tenured CEOs to invest in labor more accurately.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 2","pages":"Article 100475"},"PeriodicalIF":2.9,"publicationDate":"2025-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144107812","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-08-01Epub Date: 2025-04-19DOI: 10.1016/j.jcae.2025.100470
Jingxin Hu , Bin Liu , Tao Li , Lihua Yuan
This paper investigates the impact of fiscal stress on the corporate structure of affiliates. When facing a high fiscal deficit, governments may prompt firms to set up subsidiaries rather than branches as subsidiaries pay more taxes locally. Consistent with the prediction, we find that fiscal stress is positively associated with firms’ tendency to establish subsidiaries, and that the relationship is weaker in cities with higher GDP or higher administrative hierarchy. We also show that firms’ incentives to obtain cheap land and public subsidies induce their cooperative behavior. Cross-sectional analyses indicate that non-SOE firms and those with higher growth potential are more likely to align with deficit-facing governments’ preferences. Overall, our findings suggest that governments play an important role in shaping firms’ organizational choice.
{"title":"Government fiscal stress and firms’ choice of affiliates","authors":"Jingxin Hu , Bin Liu , Tao Li , Lihua Yuan","doi":"10.1016/j.jcae.2025.100470","DOIUrl":"10.1016/j.jcae.2025.100470","url":null,"abstract":"<div><div>This paper investigates the impact of fiscal stress on the corporate structure of affiliates. When facing a high fiscal deficit, governments may prompt firms to set up subsidiaries rather than branches as subsidiaries pay more taxes locally. Consistent with the prediction, we find that fiscal stress is positively associated with firms’ tendency to establish subsidiaries, and that the relationship is weaker in cities with higher GDP or higher administrative hierarchy. We also show that firms’ incentives to obtain cheap land and public subsidies induce their cooperative behavior. Cross-sectional analyses indicate that non-SOE firms and those with higher growth potential are more likely to align with deficit-facing governments’ preferences. Overall, our findings suggest that governments play an important role in shaping firms’ organizational choice.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 2","pages":"Article 100470"},"PeriodicalIF":2.9,"publicationDate":"2025-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143867745","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-08-01Epub Date: 2025-04-01DOI: 10.1016/j.jcae.2025.100468
Yongliang Yang , Jitao Zhang , Changting Song , Yingying Wu , Bingbing Zhang
We investigate the effect of environmental information disclosure on the information content of stock prices using data from Chinese-listed companies from 2008 to 2020. We find the following: (1) Environmental information disclosure can increase the information content of future cash flows in stock prices. This effect is long-term, not short-term. (2) This effect is more pronounced in state-owned enterprises, firms with higher institutional ownership and lower management ownership. Voluntary and soft disclosures have a significant effect on stock price informativeness. (3) Environmental information disclosure helps management obtain more investment information from stock prices and promotes the real investment efficiency of enterprises. This research is of great significance for the correct understanding of corporate ESG practices and improvements to the efficiency of capital market allocation.
{"title":"Does environmental information disclosure make financial markets more informative? Evidence from China","authors":"Yongliang Yang , Jitao Zhang , Changting Song , Yingying Wu , Bingbing Zhang","doi":"10.1016/j.jcae.2025.100468","DOIUrl":"10.1016/j.jcae.2025.100468","url":null,"abstract":"<div><div>We investigate the effect of environmental information disclosure on the information content of stock prices using data from Chinese-listed companies from 2008 to 2020. We find the following: (1) Environmental information disclosure can increase the information content of future cash flows in stock prices. This effect is long-term, not short-term. (2) This effect is more pronounced in state-owned enterprises, firms with higher institutional ownership and lower management ownership. Voluntary and soft disclosures have a significant effect on stock price informativeness. (3) Environmental information disclosure helps management obtain more investment information from stock prices and promotes the real investment efficiency of enterprises. This research is of great significance for the correct understanding of corporate ESG practices and improvements to the efficiency of capital market allocation.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 2","pages":"Article 100468"},"PeriodicalIF":2.9,"publicationDate":"2025-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143815076","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-08-01Epub Date: 2025-05-20DOI: 10.1016/j.jcae.2025.100476
Xiao Chen , Narisa Tianjing Dai , Leo Jiahe Liu
This study introduces a novel measure, major customer diversity, to capture the heterogeneity in firms’ major customer bases, and examines its implications for audit practices. While engaging with heterogeneous major customers may help firms stabilize revenues and mitigate overstocking costs, we argue that such diversification increases auditors’ perceived business risk and the complexity of audit procedures. Our empirical findings indicate that major customer diversity is positively and significantly related to audit pricing, suggesting that auditors incorporate this dimension into their risk assessments and fee structures. Furthermore, we find that this effect is amplified when firms exhibit high dependence on major customers or operate with greater complexity. Additional analyses demonstrate that major customer diversity has broader implications for financial reporting outcomes, including shorter audit report lags, reduced discretionary accruals, a higher likelihood of financial restatements, and a decreased probability of receiving going-concern opinions. Moreover, firms with diversified major customers tend to hold less accounts receivables and finished goods and form greater investments in works-in-process and raw materials and customer-specific assets (e.g., property, plant, and equipment), indicating the leveling of liquidity and operational risks.
{"title":"Audit implications of major customer diversity","authors":"Xiao Chen , Narisa Tianjing Dai , Leo Jiahe Liu","doi":"10.1016/j.jcae.2025.100476","DOIUrl":"10.1016/j.jcae.2025.100476","url":null,"abstract":"<div><div>This study introduces a novel measure, major customer diversity, to capture the heterogeneity in firms’ major customer bases, and examines its implications for audit practices. While engaging with heterogeneous major customers may help firms stabilize revenues and mitigate overstocking costs, we argue that such diversification increases auditors’ perceived business risk and the complexity of audit procedures. Our empirical findings indicate that major customer diversity is positively and significantly related to audit pricing, suggesting that auditors incorporate this dimension into their risk assessments and fee structures. Furthermore, we find that this effect is amplified when firms exhibit high dependence on major customers or operate with greater complexity. Additional analyses demonstrate that major customer diversity has broader implications for financial reporting outcomes, including shorter audit report lags, reduced discretionary accruals, a higher likelihood of financial restatements, and a decreased probability of receiving going-concern opinions. Moreover, firms with diversified major customers tend to hold less accounts receivables and finished goods and form greater investments in works-in-process and raw materials and customer-specific assets (e.g., property, plant, and equipment), indicating the leveling of liquidity and operational risks.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 2","pages":"Article 100476"},"PeriodicalIF":2.9,"publicationDate":"2025-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144115940","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-08-01Epub Date: 2025-03-28DOI: 10.1016/j.jcae.2025.100467
Pedro Ortín-Ángel , Stefan Sundgren , Ana Millán
The research presents two competing views on the welfare effects of occupational licensing. One stream of literature suggests that licensing is a barrier to entry into professions, limiting competition and resulting in economic rents. A second stream suggests that they can increase well-being by alleviating information problems. We use data on CPAs’ salaries before and after certification to test these conflicting hypotheses. Consistent with the information-alleviation hypothesis, we find a positive correlation between performance on the CPA exam and auditors’ salaries after the exam but not before the exam when the competencies have developed. Furthermore, we find that the positive association is stronger for auditors working at Big 4 firms, younger auditors and male auditors. The abovementioned results indicate that auditors’ technical competencies are valued more highly by Big 4 firms than by non-Big 4 firms. After the CPA certification, we do not observe salary increases that are greater than expected based on previous years’ increases and auditors’ performance on the CPA exam, as the barrier-to-entry theoretical approach suggests. We discuss the implications of the results for the role of CPA regulation.
{"title":"CPA exam score and auditors’ salaries","authors":"Pedro Ortín-Ángel , Stefan Sundgren , Ana Millán","doi":"10.1016/j.jcae.2025.100467","DOIUrl":"10.1016/j.jcae.2025.100467","url":null,"abstract":"<div><div>The research presents two competing views on the welfare effects of occupational licensing. One stream of literature suggests that licensing is a barrier to entry into professions, limiting competition and resulting in economic rents. A second stream suggests that they can increase well-being by alleviating information problems. We use data on CPAs’ salaries before and after certification to test these conflicting hypotheses. Consistent with the information-alleviation hypothesis, we find a positive correlation between performance on the CPA exam and auditors’ salaries after the exam but not before the exam when the competencies have developed. Furthermore, we find that the positive association is stronger for auditors working at Big 4 firms, younger auditors and male auditors. The abovementioned results indicate that auditors’ technical competencies are valued more highly by Big 4 firms than by non-Big 4 firms. After the CPA certification, we do not observe salary increases that are greater than expected based on previous years’ increases and auditors’ performance on the CPA exam, as the barrier-to-entry theoretical approach suggests. We discuss the implications of the results for the role of CPA regulation.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 2","pages":"Article 100467"},"PeriodicalIF":2.9,"publicationDate":"2025-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143768760","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-08-01Epub Date: 2025-04-01DOI: 10.1016/j.jcae.2025.100469
Liyi Zhu , Qian Sun , Wenyu Zhang , Jian Sun , Lidong Zheng
In this study, we examine the efficacy of the China Securities Investor Services Center (CSISC), an advanced minority shareholder safeguard mechanism endorsed by the China Securities Regulatory Commission (CRSC), in promoting the quality of information disclosure. By utilizing a difference-in-differences analysis on the sample of Chinese listed companies, we find that CSISC shareholding improves the readability of annual reports. Additional analyses reveals that the impact of CSISC shareholding on the readability of annual reports is more pronounced with weaker internal and external governance supervision, poorer operational performance, stronger competitive intensity and senior management without a legal background. Our study contributes to the research related to the economic consequences of the CSISC exercise at the micro-enterprise level and the determinant of annual report readability. Furthermore, our findings hold significant implications for regulatory authorities aiming to enhance the investor protection system.
{"title":"Supervision of not-for-profit minority institutional shareholder and annual report readability: Evidence from a quasi-natural experiment☆","authors":"Liyi Zhu , Qian Sun , Wenyu Zhang , Jian Sun , Lidong Zheng","doi":"10.1016/j.jcae.2025.100469","DOIUrl":"10.1016/j.jcae.2025.100469","url":null,"abstract":"<div><div>In this study, we examine the efficacy of the China Securities Investor Services Center (CSISC), an advanced minority shareholder safeguard mechanism endorsed by the China Securities Regulatory Commission (CRSC), in promoting the quality of information disclosure. By utilizing a difference-in-differences analysis on the sample of Chinese listed companies, we find that CSISC shareholding improves the readability of annual reports. Additional analyses reveals that the impact of CSISC shareholding on the readability of annual reports is more pronounced with weaker internal and external governance supervision, poorer operational performance, stronger competitive intensity and senior management without a legal background. Our study contributes to the research related to the economic consequences of the CSISC exercise at the micro-enterprise level and the determinant of annual report readability. Furthermore, our findings hold significant implications for regulatory authorities aiming to enhance the investor protection system.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 2","pages":"Article 100469"},"PeriodicalIF":2.9,"publicationDate":"2025-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143777645","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-08-01Epub Date: 2025-02-26DOI: 10.1016/j.jcae.2025.100464
Xiang Luo , Yi Luo , Jianan Zhou
Previous research suggests that including performance commitment contracts (PCs) in mergers and acquisitions (M&As) increases the post-acquisition risk of goodwill impairment. Using a sample of Chinese companies from 2017 to 2022, we find that M&As with PCs not only lead auditors to be more likely to disclose M&A-related key audit matters (KAMs) in audit reports but also result in these disclosures being less boilerplate. Moreover, KAMs related to M&As with PCs are more informative, as evidenced by higher cumulative absolute abnormal returns, greater abnormal trading volume, and lower share price synchronisation. Our findings further indicate that the negative relationship between PCs and the disclosure of boilerplate M&A-related KAMs is particularly pronounced when auditors face higher accountability risks or when they are more prudent or prioritise their professional reputations. Additionally, M&A-related KAMs with more detailed information attract greater attention from analysts and institutional investors. Overall, our results suggest that auditors, driven by professional diligence, enhance the communicative value of KAMs by disclosing non-boilerplate information, thereby facilitating the effective transmission of risk information in the capital market.
{"title":"The communicative value of key audit matters in M&As: The effect of performance commitments","authors":"Xiang Luo , Yi Luo , Jianan Zhou","doi":"10.1016/j.jcae.2025.100464","DOIUrl":"10.1016/j.jcae.2025.100464","url":null,"abstract":"<div><div>Previous research suggests that including performance commitment contracts (PCs) in mergers and acquisitions (M&As) increases the post-acquisition risk of goodwill impairment. Using a sample of Chinese companies from 2017 to 2022, we find that M&As with PCs not only lead auditors to be more likely to disclose M&A-related key audit matters (KAMs) in audit reports but also result in these disclosures being less boilerplate. Moreover, KAMs related to M&As with PCs are more informative, as evidenced by higher cumulative absolute abnormal returns, greater abnormal trading volume, and lower share price synchronisation. Our findings further indicate that the negative relationship between PCs and the disclosure of boilerplate M&A-related KAMs is particularly pronounced when auditors face higher accountability risks or when they are more prudent or prioritise their professional reputations. Additionally, M&A-related KAMs with more detailed information attract greater attention from analysts and institutional investors. Overall, our results suggest that auditors, driven by professional diligence, enhance the communicative value of KAMs by disclosing non-boilerplate information, thereby facilitating the effective transmission of risk information in the capital market.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 2","pages":"Article 100464"},"PeriodicalIF":2.9,"publicationDate":"2025-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143549829","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-08-01Epub Date: 2025-04-23DOI: 10.1016/j.jcae.2025.100473
Haiyan Jiang , Kun Su , Ahsan Habib
This paper examines the association between government subsidies and firm-level managerial slack for a sample of Chinese listed firms over the period 2005–2018. Managerial slack is the excess spending, compensation, and perquisites consumed by managers at the expense of shareholders’ wealth. Measuring managerial slack as the abnormal administrative expenses following Fang, He, and Conyon (2018) and Fang, He, and Shaw (2018), we find that government subsidies are positively associated with firms’ managerial slack. This positive association, however, is attenuated for firms with strong internal control and firms headquartered in regions with a high level of social trust. Further analysis demonstrates that the positive association is driven by firms receiving non-tax-related government subsidies. Our main result remains robust after addressing endogeneity concerns. Finally, we show that the stock market penalizes subsidy-receiving firms with high managerial slack.
本文以2005-2018年中国上市公司为样本，研究了政府补贴与公司层面管理懈怠之间的关系。管理懈怠是指管理者以牺牲股东财富为代价而消耗的超额支出、薪酬和额外福利。继Fang， He, and Conyon（2018）和Fang， He, and Shaw（2018）之后，我们将管理松弛作为异常管理费用来衡量，发现政府补贴与企业管理松弛呈正相关。然而，对于具有强大内部控制的公司和总部位于社会信任度高的地区的公司，这种积极联系减弱了。进一步分析表明，这种正向关联是由企业获得与税收无关的政府补贴所驱动的。在解决内生性问题后，我们的主要结果仍然强劲。最后，我们证明了股票市场对高管理松弛度的接受补贴的公司进行了惩罚。
{"title":"Government subsidies and managerial slack: Evidence from China","authors":"Haiyan Jiang , Kun Su , Ahsan Habib","doi":"10.1016/j.jcae.2025.100473","DOIUrl":"10.1016/j.jcae.2025.100473","url":null,"abstract":"<div><div>This paper examines the association between government subsidies and firm-level managerial slack for a sample of Chinese listed firms over the period 2005–2018. Managerial slack is the excess spending, compensation, and perquisites consumed by managers at the expense of shareholders’ wealth. Measuring managerial slack as the abnormal administrative expenses following Fang, He, and Conyon (2018) and Fang, He, and Shaw (2018), we find that government subsidies are positively associated with firms’ managerial slack. This positive association, however, is attenuated for firms with strong internal control and firms headquartered in regions with a high level of social trust. Further analysis demonstrates that the positive association is driven by firms receiving non-tax-related government subsidies. Our main result remains robust after addressing endogeneity concerns. Finally, we show that the stock market penalizes subsidy-receiving firms with high managerial slack.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 2","pages":"Article 100473"},"PeriodicalIF":2.9,"publicationDate":"2025-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143877061","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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