2024 Vol. 38, No. 4
Display Method:
2024, 38(4): 3-22.
Abstract:
This study takes share pledging by controlling shareholders as the research setting and adopts a market manipulation perspective to explore the mechanism of the generation and dissemination of favorable rumors in listed firms. The findings reveal a significant positive correlation between controlling shareholders’ share pledging and the volume of favorable corporate rumors. Moderating effect tests indicate that this positive relationship becomes more pronounced when controlling shareholders have stronger market manipulation incentives or greater opportunities for manipulation. Further analysis shows that the pressure from pledge warnings is significantly correlated with an increase in favorable rumors, and the probability of favorable rumors rises notably before controlling shareholders provide additional collateral. Economic consequence analysis demonstrates that while favorable rumors significantly boost stock prices, they also hurt market information efficiency. These results suggest that during periods of share pledging, favorable rumors serve as an effective information-based market manipulation tool, helping controlling shareholders stabilize stock prices and mitigate the risk of control transfer. This study provides empirical evidence on how stakeholders’ market manipulation motives influence stock market rumors, thereby enriching the literature on information-based market manipulation.
This study takes share pledging by controlling shareholders as the research setting and adopts a market manipulation perspective to explore the mechanism of the generation and dissemination of favorable rumors in listed firms. The findings reveal a significant positive correlation between controlling shareholders’ share pledging and the volume of favorable corporate rumors. Moderating effect tests indicate that this positive relationship becomes more pronounced when controlling shareholders have stronger market manipulation incentives or greater opportunities for manipulation. Further analysis shows that the pressure from pledge warnings is significantly correlated with an increase in favorable rumors, and the probability of favorable rumors rises notably before controlling shareholders provide additional collateral. Economic consequence analysis demonstrates that while favorable rumors significantly boost stock prices, they also hurt market information efficiency. These results suggest that during periods of share pledging, favorable rumors serve as an effective information-based market manipulation tool, helping controlling shareholders stabilize stock prices and mitigate the risk of control transfer. This study provides empirical evidence on how stakeholders’ market manipulation motives influence stock market rumors, thereby enriching the literature on information-based market manipulation.
2024, 38(4): 23-45.
Abstract:
Public health crises have exerted profound impacts on the economy and society, yet their mechanisms on corporate financing decisions remain unclear and less well studied. Using a sample of China’s A-share listed firms in Shanghai and Shenzhen stock markets from 2020 to 2021, this paper examines the effects of public health crises on corporate trade credit financing. The findings reveal that the negative impact of public health crises on production and operations can reduce corporate trade credit financing, and the positive impact of public health crises on production and operations can improve corporate trade credit financing. Digital transformation can alleviate the negative impact of public health crises on corporate trade credit financing, and enhance the positive impact of public health crises on corporate trade credit financing. Upstream suppliers exhibit greater sensitivity to the inhibitory effects of trade credit financing caused by public health crises, while downstream customers exhibit greater sensitivity to the promoting effects of trade credit financing caused by public health crises. The inhibitory effects on corporate trade credit financing weaken when firms operate in less concentrated supply chains, or hold stronger market positions. This paper explores the micro-economic consequences of public health crises from the perspective of trade credit financing, and provides empirical support for promoting corporate digital transformation to better prevent and mitigate operational risks induced by sudden public health crises.
Public health crises have exerted profound impacts on the economy and society, yet their mechanisms on corporate financing decisions remain unclear and less well studied. Using a sample of China’s A-share listed firms in Shanghai and Shenzhen stock markets from 2020 to 2021, this paper examines the effects of public health crises on corporate trade credit financing. The findings reveal that the negative impact of public health crises on production and operations can reduce corporate trade credit financing, and the positive impact of public health crises on production and operations can improve corporate trade credit financing. Digital transformation can alleviate the negative impact of public health crises on corporate trade credit financing, and enhance the positive impact of public health crises on corporate trade credit financing. Upstream suppliers exhibit greater sensitivity to the inhibitory effects of trade credit financing caused by public health crises, while downstream customers exhibit greater sensitivity to the promoting effects of trade credit financing caused by public health crises. The inhibitory effects on corporate trade credit financing weaken when firms operate in less concentrated supply chains, or hold stronger market positions. This paper explores the micro-economic consequences of public health crises from the perspective of trade credit financing, and provides empirical support for promoting corporate digital transformation to better prevent and mitigate operational risks induced by sudden public health crises.
2024, 38(4): 46-60.
Abstract:
The application of accrual-based government comprehensive financial reports is an important breakthrough for improving the government’s fiscal and financial management capability. In recent years, the compilation of the government’s comprehensive financial reports has basically achieved full coverage across central and local government departments at all levels. Combining local practice, this study finds that there are still many difficulties and room for optimization in applying accrual-based government comprehensive financial reports to meet the needs of government management, particularly in terms of fully identifying government financial risks, reflecting key departmental decision-making priorities, and linking with budget performance management. This paper suggests that a framework for the application of government comprehensive financial reports should be gradually established to meet the needs of government management and adapt to its evolving demands. This framework can be achieved by improving the content preparation of the reports, optimizing the design of metrics for their application, and strengthening their integration with financial management. The goal is to maximize the utility of the information contained in these reports and thereby continuously enhance the government’s fiscal and financial management capability.
The application of accrual-based government comprehensive financial reports is an important breakthrough for improving the government’s fiscal and financial management capability. In recent years, the compilation of the government’s comprehensive financial reports has basically achieved full coverage across central and local government departments at all levels. Combining local practice, this study finds that there are still many difficulties and room for optimization in applying accrual-based government comprehensive financial reports to meet the needs of government management, particularly in terms of fully identifying government financial risks, reflecting key departmental decision-making priorities, and linking with budget performance management. This paper suggests that a framework for the application of government comprehensive financial reports should be gradually established to meet the needs of government management and adapt to its evolving demands. This framework can be achieved by improving the content preparation of the reports, optimizing the design of metrics for their application, and strengthening their integration with financial management. The goal is to maximize the utility of the information contained in these reports and thereby continuously enhance the government’s fiscal and financial management capability.
2024, 38(4): 61-83.
Abstract:
Driven by green development policies and dual-carbon goals, corporate environmental, social, and governance (ESG) performance has become an important factor influencing audit engagements. Using a sample of A-share listed companies in Shanghai and Shenzhen stock markets from 2009 to 2023, this study empirically examines the impact of ESG performance on auditor changes. The findings reveal that poorer ESG performance increases the likelihood of auditor changes, and the successor auditors are more likely to be non-Big 10 audit firms. Mechanism tests indicate that corporate financial risk and litigation risk mediate the above relationship. Heterogeneity analyses demonstrate that the effect of ESG performance on auditor changes is more pronounced in non-state-owned enterprises, firms audited by industry-specialized auditors, and regions with weaker environmental regulation intensity. Further research finds that ESG-driven auditor changes lead to higher audit fees, and compared to the social responsibility dimension, the environmental and governance dimensions exert more significant impacts on auditor changes. This study enriches research on the economic consequences of ESG performance and provides theoretical insights for audit firms to identify audit risks and select clients.
Driven by green development policies and dual-carbon goals, corporate environmental, social, and governance (ESG) performance has become an important factor influencing audit engagements. Using a sample of A-share listed companies in Shanghai and Shenzhen stock markets from 2009 to 2023, this study empirically examines the impact of ESG performance on auditor changes. The findings reveal that poorer ESG performance increases the likelihood of auditor changes, and the successor auditors are more likely to be non-Big 10 audit firms. Mechanism tests indicate that corporate financial risk and litigation risk mediate the above relationship. Heterogeneity analyses demonstrate that the effect of ESG performance on auditor changes is more pronounced in non-state-owned enterprises, firms audited by industry-specialized auditors, and regions with weaker environmental regulation intensity. Further research finds that ESG-driven auditor changes lead to higher audit fees, and compared to the social responsibility dimension, the environmental and governance dimensions exert more significant impacts on auditor changes. This study enriches research on the economic consequences of ESG performance and provides theoretical insights for audit firms to identify audit risks and select clients.
2024, 38(4): 84-107.
Abstract:
To achieve the dual-carbon goals, environmental regulations in China have become increasingly stringent, with the intensity of environmental administrative penalties continuously strengthened. This study examines the effect and underlying mechanisms of environmental administrative penalties on audit pricing using a sample of A-share listed companies in heavily polluting industries from 2013 to 2022. The findings reveal that audit pricing increases when enterprises face environmental administrative penalties, demonstrating that the greater the penalty intensity, the higher the audit pricing. This effect is primarily driven by risk compensation mechanisms, while cost compensation plays a comparatively minor role. Further analysis demonstrates that financial risk mediates the impact of environmental administrative penalties on audit pricing. Specifically, penalty intensity indirectly influences audit pricing through two chain mediation pathways: financial risk–audit input and financial risk–audit risk premium. Heterogeneity tests indicate that non-state-owned enterprises experience more pronounced audit fee increases following environmental penalties compared to their state-owned counterparts. These conclusions provide theoretical references and empirical evidence for optimizing government environmental penalty measures and promoting enterprises green development.
To achieve the dual-carbon goals, environmental regulations in China have become increasingly stringent, with the intensity of environmental administrative penalties continuously strengthened. This study examines the effect and underlying mechanisms of environmental administrative penalties on audit pricing using a sample of A-share listed companies in heavily polluting industries from 2013 to 2022. The findings reveal that audit pricing increases when enterprises face environmental administrative penalties, demonstrating that the greater the penalty intensity, the higher the audit pricing. This effect is primarily driven by risk compensation mechanisms, while cost compensation plays a comparatively minor role. Further analysis demonstrates that financial risk mediates the impact of environmental administrative penalties on audit pricing. Specifically, penalty intensity indirectly influences audit pricing through two chain mediation pathways: financial risk–audit input and financial risk–audit risk premium. Heterogeneity tests indicate that non-state-owned enterprises experience more pronounced audit fee increases following environmental penalties compared to their state-owned counterparts. These conclusions provide theoretical references and empirical evidence for optimizing government environmental penalty measures and promoting enterprises green development.
2024, 38(4): 108-134.
Abstract:
This study examines the impact of customer excessive financialization on supplier earnings management using customer-supplier relationship data disclosed in annual reports of Chinese listed firms from 2010 to 2021. The findings reveal that customer excessive financialization significantly increases supplier accrual-based earnings management, with risk contagion serving as a key transmission mechanism. These results remain robust after addressing endogeneity concerns and conducting a series of exclusive tests. Heterogeneity analysis demonstrates that the positive effect of customer financialization on supplier accrual-based earnings management is more pronounced when suppliers have weaker bargaining power or when the geographical distance between customers and suppliers is greater. Further economic consequence tests show that moderate earnings management induced by customer financialization enhances suppliers’ core business performance, whereas excessive earnings management yields no such benefits. This indirectly validates the dual nature of earnings management and underscores the importance of maintaining moderate behavior. The study provides evidence that customer financial asset allocation patterns exert risk contagion effects on supplier earnings management behavior, with appropriate earnings management serving as a value-enhancing financial strategy. By uncovering the interactive relationship between customer financialization and supplier earnings management choices from a supply chain perspective, this research offers important theoretical and practical insights for improving corporate financial asset allocation efficiency and policy making for enhancing supply chain stability and competitiveness.
This study examines the impact of customer excessive financialization on supplier earnings management using customer-supplier relationship data disclosed in annual reports of Chinese listed firms from 2010 to 2021. The findings reveal that customer excessive financialization significantly increases supplier accrual-based earnings management, with risk contagion serving as a key transmission mechanism. These results remain robust after addressing endogeneity concerns and conducting a series of exclusive tests. Heterogeneity analysis demonstrates that the positive effect of customer financialization on supplier accrual-based earnings management is more pronounced when suppliers have weaker bargaining power or when the geographical distance between customers and suppliers is greater. Further economic consequence tests show that moderate earnings management induced by customer financialization enhances suppliers’ core business performance, whereas excessive earnings management yields no such benefits. This indirectly validates the dual nature of earnings management and underscores the importance of maintaining moderate behavior. The study provides evidence that customer financial asset allocation patterns exert risk contagion effects on supplier earnings management behavior, with appropriate earnings management serving as a value-enhancing financial strategy. By uncovering the interactive relationship between customer financialization and supplier earnings management choices from a supply chain perspective, this research offers important theoretical and practical insights for improving corporate financial asset allocation efficiency and policy making for enhancing supply chain stability and competitiveness.
2024, 38(4): 135-158.
Abstract:
As an important supplementary channel to statutory information disclosure, stock exchange online platforms provide centralized and efficient communication channels for market participants. Using textual data from the “e-interaction” platform of the Shanghai Stock Exchange and the “Interactive Easy” platform of the Shenzhen Stock Exchange, this study examines the impact of firm-investor interaction quality on earnings value relevance with a sample of A-share listed firms in China from 2011 to 2022. The results show a significant positive correlation between interaction quality and earnings value relevance, indicating that higher-quality interactions enhance the value relevance of earnings information. Further analysis reveals that this effect is more pronounced when firms demonstrate higher response rates or more detailed replies, as well as among firms with lower information disclosure quality or lower institutional ownership. Mechanism tests suggest that improved information transparency serves as a key channel through which high-quality online interactions affect earnings value relevance.
As an important supplementary channel to statutory information disclosure, stock exchange online platforms provide centralized and efficient communication channels for market participants. Using textual data from the “e-interaction” platform of the Shanghai Stock Exchange and the “Interactive Easy” platform of the Shenzhen Stock Exchange, this study examines the impact of firm-investor interaction quality on earnings value relevance with a sample of A-share listed firms in China from 2011 to 2022. The results show a significant positive correlation between interaction quality and earnings value relevance, indicating that higher-quality interactions enhance the value relevance of earnings information. Further analysis reveals that this effect is more pronounced when firms demonstrate higher response rates or more detailed replies, as well as among firms with lower information disclosure quality or lower institutional ownership. Mechanism tests suggest that improved information transparency serves as a key channel through which high-quality online interactions affect earnings value relevance.
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