Open Access. Powered by Scholars. Published by Universities.®

Business Commons

Open Access. Powered by Scholars. Published by Universities.®

China

Research Collection School Of Accountancy

Finance and Financial Management

Articles 1 - 1 of 1

Full-Text Articles in Business

China's Anti‐Corruption Campaign And Financial Reporting Quality, Ole-Kristian Hope, Heng Yue, Qinlin Zhong Jun 2020

China's Anti‐Corruption Campaign And Financial Reporting Quality, Ole-Kristian Hope, Heng Yue, Qinlin Zhong

Research Collection School Of Accountancy

We examine the impact of China’s anti-corruption campaign on firm-level financial reporting quality (FRQ). As an important component of the anti-corruption campaign, in October 2013, “Rule 18” was issued to prohibit party and government officials from serving as directors for publicly listed firms. The regulation led to a large number of official directors resigning from their roles as directors involuntarily. As such, Rule 18 has effectively weakened, if not fullydiscontinued, the political connections of the firms that previously hired officials as directors. Our empirical analyses employ a difference-in-differences research design with firm fixed effects and PSM to examine the pre- …