Do auditors favor clients with government favoritism?
In: Journal of accounting and public policy, Volume 46, p. 107215
ISSN: 1873-2070
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In: Journal of accounting and public policy, Volume 46, p. 107215
ISSN: 1873-2070
In: Journal of Business Finance & Accounting, Volume 46, Issue 5-6, p. 686-711
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In: The journal of financial research: the journal of the Southern Finance Association and the Southwestern Finance Association
ISSN: 1475-6803
AbstractIn this article, we examine whether and how small investors' social media activity is associated with subsequent bond credit spreads. We use extensive data from posts/comments on social media 30 days before the bond issuance announcement date to identify their implied power and find that the more posts/comments, the smaller the bond issuance spreads. We further find that information quality improvement of posts increases this negative relation between social media activity and bond cost, and that posts directly related to issuers' fundamentals and/or debt financing drive our main results. Additional tests show that the effect is more salient when there is a greater demand for information quality or when macroeconomic conditions worsen.
In: Contemporary Accounting Research, Volume 40, Issue 2
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In: Journal of Corporate Finance, Volume 64
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In: Journal of International Accounting Research, p. 1-25
ISSN: 1558-8025
ABSTRACT
Prior research has argued that companies in transition economies engage in corporate social responsibility (CSR) activities to achieve political goals, such as building connections with the government. However, it is unclear why chief executive officers (CEOs) agree to make these politically driven CSR decisions that mainly benefit the controlling shareholders. We show that controlling shareholders may "bribe" the CEOs with greater compensation or perks—a form of economic rents extracted by the CEOs—to make CSR decisions, and such a pattern is more salient in local government-owned companies. We reason that these CSR activities reflect implicit contracting between the controlling shareholders and the CEOs. Through cross-section analyses, we find that the CEO's economic rents vary with local government fiscal needs, the firm's governance structure, and CEO power. Furthermore, we demonstrate that increases in CSR-linked compensation lead to a decline in shareholder value.
Data Availability: All data are available from public databases identified in the paper.
JEL Classifications: D72; M12; P26.
In: Bhandari, A., Golden, J., Walker, K., & Zhang, J. H. (2021). The relationship between stock repurchase completion rates, firm reputation and financial reporting quality: a commitment‐trust theory perspective. Accounting & Finance.
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Working paper
In: Journal of the Knowledge Economy (2023). https://doi.org/10.1007/s13132-023-01113-2
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