Corporate top executives' adaptation to big data technological trends and timely updating of traditional mindsets play crucial roles in driv-ing corporate innovation.Grounded in the expansion logic of big data technology and upper echelons theory,this study investigates how executives' big data thinking influences corporate innovation.By utilizing machine learning methods,we construct a big data thinking indicator for corporate executives and find that such thinking significantly enhances corporate innovation levels.Mechanism analysis reveals that big data thinking improves organizational capa-bilities in handling complex information environments,with more pronounced innovation-enhancing effects observed when firms face a more complex infor-mation environment or when management teams lack science and engineering educational backgrounds.Further analysis demonstrates that executives' big data thinking effectively improves innovation quality.This research extends the investigation into the economic consequences of big data development from a cognitive perspective,provides empirical evidence for stimulating corporate innovation vitality,and offers policy implications for promoting high-quality e-conomic development.
Digital transformation is pivotal to the high-quality development of the audit profession in China.This paper examines the impact of digital bank confirmations on audit quality as part of this transformation.We find that digital bank confirmations significantly improve cash flow audit quality.The effect is particularly pronounced when auditors assess a higher risk of material misstatement,possess greater industry expertise,or face heavier workloads.Further analysis reveals that digital confirmations improve the persistence of cash flow components of earnings and mitigate the cash flow anomaly,thereby enhancing market pricing efficiency.Additionally,digital bank confirmations may have spillover effects on other high-risk audit items.This study investi-gates the relationship between digital bank information and cash flow audit quality,providing empirical evidence on the economic consequences of the dig-ital transformation in auditing and contributing to the literature on audit quality and its influencing factors.The findings provide valuable insights for the implementation of digital bank confirmations in future audit practices.
The random inspection of the China Securities Regulatory Commission (CSRC) is an important policy for practicing "standardizing regulatory behavior and innovating management modes". This study investigates how CSRC's random affect capital market information efficiency from the perspective of stock price synchronicity. Using a sample of China's non-financial A-share firms from 2013 to 2019, we find that random inspections significantly reduced the stock price synchronicity of inspected firms. Random inspections could increase the probability of releasing management earnings forecasts, media coverage and investor attention, and thereby improve information efficiency. Further study finds that the effect of random inspections on stock price synchronicity is stronger for non-state controlled firms, districts with more listed firms, and districts with more transparent government. This study enriches the literature on the consequences of random inspections and extends our knowledge of the relationship between regulatory innovations and the information efficiency of the capital market.
Based on the theory of social network,this study explores the use of network information by green fund and its impact on the performance of corporate environmental responsibility.Focusing on"information transmission"and"information barrier",this study finds that the green fund uses the network to collect information for the purpose of improving company's environmental performance,and the information transmission of funds with highly similar styles will be blocked due to the competition,which will inversely affect the company's environmental performance.The heterogeneity test shows that the promotion of corporate environmental responsibility fulfillment by the degree of green fund network centrality will be more significant in the case of long fund manager tenure,high fund performance rankings,low corporate pollution levels,and corporate CEOs without environmental backgrounds.The conclusions of this study are of great practical significance for effectively guiding the allocation of green funds and helping enterprises to transform into green according to the industry's green development norms.
This paper explores the impact of open market share repurchases (OMR) on stock price synchronicity. We find that share repurchases significantly enhances the information content of stock prices, reflected in reduced price synchronicity. The mechanism includes repurchases drawing investor attention, encouraging more idiosyncratic information disclosures, and increasing media coverage. This effect is more pronounced in firms with high information asymmetry, those leveraging repurchases for reputation, or emphasizing R&D. Further analysis reveals that characteristics and execution of repurchase programmes impact differently.Overall, OMR acts as an effective signal, attracting attention from external market participants and improving the firm's informational environment.
Using a hand-collected data set of Chinese A-share non-financial listed companies spanning years 2005-2020,this study examines whether directors'information technology expertise influences firms'total factor productivity.Our findings indicate a significant and positive effect.The positive effect is more salient for firms with lower capital intensity and firms in noncompetitive product markets.Furthermore,two mechanisms through which directors'information technology expertise improves total factor productivity have been identified:one is the increase in information technology in-vestments;the other one is the enhancement in operating efficiency of fixed assets.Our study not only sheds new lights on the effects of directors'informa-tion technology expertise,but also provides convergent evidence on the determinants of firm-level total factor productivity.
ABSTRACT The paper examines the economic effects of the trial judgement of joint and several liability on BDO China. Our study has the following findings: first, the capital market regarded the judgement as a signal to strengthen investor protection; second, the judgement pushed the auditors to enhance their prudence; third, the clients’ financial reporting quality are improved after the judgment; fourth, the above phenomena are more pronounced in areas where administrative penalties or criminal convictions are not the litigation preconditions for civil proceedings for false statements. The study denies Simunic et al. (2017)’s assertion that the legal system in China makes the recovery of damages from auditors is difficult.
The frequent occurrence of stock market trading halts not only harms the interests of investors,but also restricts the internationalization of the Chinese A-share capital market.Based on a sample of Chinese A-share listed firms on the Shanghai and Shenzhen stock exchanges,this paper exam-ines the impact of multiple large shareholders(MLS)on abnormal stock trading halts.The results reveal that listed companies with MLS have a lower probability of abnormal stock trading halts.When non-controlling shareholders'number and share percentage increase,their inhibitory effect on abnormal stock trading halts is more significant.Channel tests suggest that MLS can restrain abnormal stock trading halts by reducing tunneling activities by control-ling shareholders,increasing the proportion of dissenting votes on the corporate boards,and improving corporate information disclosure quality.The impact of MLS on abnormal stock trading halts is more pronounced in firms with lower-quality internal controls and information transparency.This paper extends the research on the governance impact of MLS,and has important insights for improving the stock trading halts system of the Chinese capital market.
This paper examines the influence of enterprise digital transformation on safety production performance. Our results indicate that digital transformation significantly improves the safety performance of China's listed enterprises. Furthermore, a series of cross-sectional analyses confirm that the effect of digital transformation on safety production performance is more prominent not only in regions with higher levels of marketisation and stronger enforcement of safety production systems but also in markets with higher competition and stronger supervision. Moreover, the proposed effect is also more significant in corporations with higher capital intensity and lower financing constraints. The mechanism tests reveal that digital transformation improves the quality of internal control and optimises corporate innovation, thereby improving the safety production performance. Our findings highlight the impact of digital technology application on enterprise production safety performance, serving as a valuable reference for promoting the development and implementation of digital technologies in the field of production safety.
Making state-owned capital and state-owned enterprises stronger, better, and larger is the key driving force for comprehensively building a modern socialist country. This paper studies the impact of non-state shareholders' governance on the product market performance of state-owned enterprises under the background of mixed ownership reform. Our results show that under the control of equity balances, non-state shareholders appointing directors to participate in governance can optimise the strategic decision-making of state-owned enterprises, promote product and service R&D innovation, and improve the operational efficiency of state-owned enterprises, thereby having a positive impact on the product market performance of state-owned enterprises. And this kind of governance effect is more obvious in state-owned enterprises in local control and competitive industries. Further research finds that the strategic effect of non-state shareholders' governance not only has long-term sustained characteristics but also has a positive spillover impact on the capital market value and operating performance of state-owned enterprises.
Using a sample of Chinese listed firms over 2011-2020,this study examines the impact of digital finance on accounting information transparency.Our findings reveal an inverted U-shaped relationship between digital finance and accounting information transparency,suggesting that digit-al finance within certain limits increases accounting information transparency by optimising information acquisition and processing,but excessive digital fi-nance leads to information overload and impairs accounting information transparency.Our findings are robust to a variety of sensitivity tests and are still val-id after using two-stage"shift-share"instrumental variable procedures,propensity score matching method and firm-level fixed effect regression to control for the endogeneity issue.Lastly,MD&A and annual reporting disclosure timeliness are two influential channels by which digital finance affects accounting information transparency.
We investigate the effect and economic consequences of bank digital transformation on corporate financial constraints using data from Chi-na.The results show that bank digital transformation alleviates corporate financial constraints by decreasing information search,processing,and verification costs.Furthermore,the effect of bank digital transformation on corporate financial constraints is more pronounced for firms with higher contract intensity,more intangible assets,and poorer external information environment.We also find that bank digital transformation alleviates corporate financial constraints by increasing debt financing.In addition,we show that digital transformation promotes lending by big banks,resulting in the crowding-out effect.Finally,we find that bank digital transformation promotes the flow of credit resources to non-zombie firms,which effectively improves credit allocation efficiency.This paper extends research on digital finance and new structural finance from the perspective of bank digital transformation.
In the external environment of enterprises,government audit serves as a unique supervision mechanism aimed at promoting high-quality development through effective audit supervision.Since 2010,the National Audit Office of China has repeatedly highlighted issues related to enterprise mer-gers and acquisitions in its announcements.This article focuses on A-share listed companies controlled by central state-owned enterprises during 2008-2018 and establishes a difference-in-differences model to examine the impact of government audit supervision on enterprise M&As.We find that govem-ment audit supervision reduces the number and scale of M&As.Further research shows that government audit has a more significant impact in enterprises facing higher legal risks and financing constraints.Additionally,government audits supervision can reduce enterprises'M&A premiums and affect payment methods.Moreover,government audit supervision significantly improves the short-term and long-term performance of M&As.The results provide empirical evidence for the governance effect of government audit on informed decision-making within enterprises.Furthermore,these findings are significant in shed-ding light on the role of government audit in China and enhancing the performance of enterprise M&As.
Corporate inter-regional investment is an important channel for building the domestic economic cycle.This paper explores the impact of firms'adaptation to regional culture on inter-regional investment based on the sample of newly-established inter-province subsidiaries of A-share listed firms in China from 2006 to 2017.We find that(1)Finns'low cultural adaptation to home region promote corporate inter-regional investment.(2)Firms are more likely to invest in regions with cultural environments that are more compatible with their own culture value(3)Firms have better invest-ment performance when investing in more culturally adapted regions through better cooperating with new stakeholders and reducing management cost.(4)The impact of cultural adaptation on inter-regional investments is also affected by the state ownership and corresponding regional formal institutions.Our findings have implications for firms to make location choice during inter-regional investment and can help governments attract capital flows.
How to improve the governance of state-owned enterprises(SOEs)and maintain the safety of state-owned assets through effective insti-tutional arrangements for state-owned assets supervision and administration is an important theoretical and practical question.This paper attempts to an-swer this question by taking the rotation of chief accountants in central SOEs as the starting point.It is found that the rotation of chief accountants can im-prove the accounting information quality in SOEs.Mechanism analyses indicate that the above result is weakened when the tenure of chief accountants is long or after the central SOEs carry out the pilot of building a standardized board or are audited by the National Audit Office.When further considering the types of rotation,the above result is only reflected when the chief accountants come from SOEs in the different industries or different cities or the chief ac-countants are promoted.Economic consequence analyses indicate that the rotation of chief accountants alleviates the problem of over-investments and ex-cess perks in SOEs by improving the accounting information quality.In summary,the rotation of chief accountants can enhance their independence and strengthen the financial management and supervision to improve the governance of SOEs and prevent the loss of state-owned assets.The research conclu-sion of this paper has important enlightenments for strengthening the supervision and maintaining the safety of state-owned assets under the background of deepening the reform of SOEs.
We examine whether firms engage in classification shifting to meet performance targets during mergers and restructuring.Using a sample of listed firms that complete major asset restructuring and sign performance commitment agreements from 2008 to 2019,we find that during the commitment period,nearly 39％of firms'step on the line'to achieve net income before non-recurring items.Compared to control firms,firms that'step on the line'to meet the target are more likely to achieve this by misclassifying recurring expenses as non-operating losses.Furthermore,this effect is more pro-nounced in firms with larger committed amounts,firms using stock to compensate for non-performance,and firms audited by non-Big 4 auditors.Overall,our paper extends the research on incentives for classification shifting and has implications for regulators to strengthen the regulation of accounting treatment in performance commitments.
With the rapid development of digital economy and technology in China, we research on whether corporate digital transformation in traditional industries can improve accounting quality as well as corporate governance. Our findings suggest that, firms proceeding more digital transformation have lower degree of earnings management and higher degree of accounting qualities. Digital transformation can improve accounting quality by reducing three types of agency costs. Specifically, digital transformation can improve corporate internal control, as well as attract more analyst tracking, to improve accounting qualities. Additional analysis suggests that, the governance effects of corporate digital transformation are more prevails in non-state firms, or weak information quality firms, as well as in long-term oriented firms. Corporate digital transformation can decrease real earnings management and stock price synchrony, increase accounting quality, reveals a positive governance effect.
The China Securities Regulatory Commission (CSRC) has randomly selected two audit firms each year to check their problems in management and internal control since 2016. Using the random inspections from 2016 to 2018, we construct a staggered DID model and find that the possibility of audit firms engaging in audit opinion shopping decreases after they are inspected. To explore the underlying logic, we document that: (1) the random inspections strengthened audit firms’ management of branch offices, resulting in a more pronounced effect on the practice of branch audit offices; and (2) the policy improved audit firms’ internal control, leading to more pronounced effect in audit firms with a heavy workload and loose control. Further, we show that punishments following the inspections strengthen the basic effect, while the effect of random inspections would be weakened for the big 10 audit firms.
The selection and weighting of performance indicators are of vital importance for an effective compensation contract.We examine the effect of the reclassification of income statement items,caused by China's new Accounting Standards for Business Enterprises(ASBE)in 2007 on the weight adjustment of compensation performance indicators.The results show that the sensitivity of executive pay and investment income increases signifi-cantly after ASBE moves investment income in the income statement from below-the-line of operating income to above-the-line,which indicates that the presentation of income statement items is directly related to the weight of compensation performance indicators.We also find that the earnings persistence of investment income increases significantly after ASBE,which implies that the reclassification of investment income conforms to business practice and al-so performs well.However,the increased sensitivity of executive pay and investment income may induce management's opportunistic investment in finan-cial assets.
This paper studies the effect of the controlling shareholder’s financial background on the corporate financialization. We find that controlling shareholder’s financial background has a significant positive impact on corporate financialization, and the positive impact is more obvious in credit advantage firms and firms with poor institutional environment and real investment environment. Firms with financial controlling shareholders will increase long-term value reserving financial investment, and firms’ financialization trend with lower financing constraints is more sensitive to controlling shareholders’ financial background, suggesting that speculating is the essential motivation of firms’ financialization, rather than precautionary saving. The mechanism test shows that controlling shareholder’s financial background mainly promotes corporate financialization by increasing the financial long-term equity investments at the parent company level. Finally, there is an inverted U relationship between corporate financialization and investment efficiency, and the marginal effect of corporate financialization on investment efficiency is greater in firms with financial shareholders.
