Annual Conference

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Accounting, Senior Fellows/Fellows

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May 2019

We examine the effect of sovereign credit rating downgrades on firms’ earnings management. Using the exogenous variation in credit ratings caused by sovereign rating downgrades from 61 countries, we show that firms reduce discretionary accruals after sovereign downgrades and are likely to experien...
Keywords: Sovereign downgrade, Ceiling rule, Credit rating, Earnings Management, Big bath accounting
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Annual Conference

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Accounting

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May 2019

This paper examines whether, in an autocratic regime such as China, social media that rely on the wisdom of crowds correct the bias of state-controlled traditional media by supplying less optimistically biased information to the market. Using a comprehensive sample of Chinese newsppaper corporate ne...
Keywords: Social media, bias, Stock Return
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Annual Conference

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Accounting, Senior Fellows/Fellows

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May 2019

We propose and validate a comprehensive measure of power for the top management teams (TMTs) of publicly listed Chinese firms. We show that our measure is positively associated with the four power dimensions developed by prior research for U.S. firms as well as three Asia-relevant power dimensions, ...
Keywords: power, top management team, executive compensation, nonmarket institutional force, China
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Annual Conference

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Accounting

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May 2019

China presents a unique opportunity to study public enforcement of mandatory disclosure when private enforcement is largely absent. Using a hand-collected sample of comment letters (CLs) on annual reports issued by the Shanghai Stock Exchange, we first show that the price reaction to CL announcement...
Keywords: public enforcement, private enforcement, institutional environment, comment letters, disclosure, ear
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Annual Conference

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Economic Transformation of Asia, Capital Market Development: China and Asia

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May 2019

This paper studies entrepreneurship and the creation of new firms in China through the lens of serial entrepreneurs, i.e. entrepreneurs who establish more than one firm, and their differences with non-serial entrepreneurs. Drawing on data on the universe of all firms in China, we document key facts ...
Keywords: Serial Entrepreneurship, Entrepreneurship, Capital Distortions
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