To switch or not to switch? The effect of audit firms’ economies of scale on audit firm switches after audit price deregulation in China

•Study uses the audit price deregulation in China in 2014 to examine if audit firms use EOS to compete for clients.•Significant increase in clients switching from a non-EOS auditor to an EOS auditor after the audit price deregulation.•EOS audit firms usually offer more audit fee discounts than non-EOS audit firms while retaining audit quality.•Effect is stronger for highly similar industries and firms paying high abnormal audit fees, firms in financial distress, and firms getting less market attention.•SOEs and political connections moderate audit firm-client realignment effects.