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POLITICAL CONNECTIONS AND ACCOUNTING CONSERVATISM: EVIDENCE FROM CHINESE LISTED FIRMS
Byungcherl Charlie Sohn; Ling Zhou
2017
Source PublicationCorporate Ownership and Control
ISSN1727-9232
Volume15Issue:1Pages:143-154
Abstract

This study investigates the effect of political connections on accounting conservatism for Chinese firms. Using the Chinese non-state-owned listed companies for the period 2008-2013, we find that the relation between political connections and accounting conservatism is insignificant because political connections may impair accounting conservatism on one aspect but also may strengthen accounting conservatism on the other aspect. This research contributes to the literature on the effect of political connections on firms’ various business activities by focusing on firms’ conservatism level of financial reporting using a unique institutional setting in China. Considering the importance of political background in transition economies like China, it is an important question whether political connections affect accounting conservatism. Our research method differs in that we measure the political connections directly using firms’ CEO or board chairman’s political background, while most prior studies measure them indirectly using firms’ donations to political elections or firms’ economic importance to the local governments. Our direct measure reduces noise in the political connection variable and allows us to more accurately investigate the effect of politically connected managers, not the effect of politically important entities, on firms’ accounting conservatism.

KeywordPolitical Connections Accounting Conservatism
DOIhttp://doi.org/10.22495/cocv15i1art14
Language英语
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Document TypeJournal article
CollectionDEPARTMENT OF ACCOUNTING AND INFORMATION MANAGEMENT
Corresponding AuthorByungcherl Charlie Sohn; Ling Zhou
AffiliationFaculty of Business Administration, University of Macau, China
First Author AffilicationFaculty of Business Administration
Corresponding Author AffilicationFaculty of Business Administration
Recommended Citation
GB/T 7714
Byungcherl Charlie Sohn,Ling Zhou. POLITICAL CONNECTIONS AND ACCOUNTING CONSERVATISM: EVIDENCE FROM CHINESE LISTED FIRMS[J]. Corporate Ownership and Control,2017,15(1):143-154.
APA Byungcherl Charlie Sohn,&Ling Zhou.(2017).POLITICAL CONNECTIONS AND ACCOUNTING CONSERVATISM: EVIDENCE FROM CHINESE LISTED FIRMS.Corporate Ownership and Control,15(1),143-154.
MLA Byungcherl Charlie Sohn,et al."POLITICAL CONNECTIONS AND ACCOUNTING CONSERVATISM: EVIDENCE FROM CHINESE LISTED FIRMS".Corporate Ownership and Control 15.1(2017):143-154.
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