{"title":"Participation and upgrading along global value chains: the role of audit oversight","authors":"Sibo Liu, Lixin Su, Feng Wu, Xindong Zhu","doi":"10.1057/s41267-024-00719-1","DOIUrl":null,"url":null,"abstract":"<p>We show that shared and improved auditing standards, as induced by the audit oversight arising from the Public Company Accounting Oversight Board (PCAOB)’s inspections on non-U.S. auditors, help global exporting firms upgrade themselves and tap into global value chains (GVCs). Using a dataset of U.S. waterway imports from global suppliers of 36 countries, we find that PCAOB international inspections not only lead to significantly more exports to U.S. buyers, particularly for intermediate and capital goods, but exporters also upgrade their product complexity. These results are consistent with enhanced information quality of exporters and thus reduced informational frictions with downstream importers. Echoing this notion, we find stronger GVC effects of PCAOB inspections for exporters facing more informational problems, i.e., for those with ex-ante lower reporting quality or smaller market shares, and those located in countries with weaker institutions or higher geopolitical risk with the U.S. PCAOB inspections also increase the duration length of the chain relationship and supplier firms’ relationship-specific investments in the chain. We further find that U.S. importers with a greater share of suppliers audited by PCAOB-inspected auditors exhibit boosted financial outcomes. Overall, our findings suggest that audit oversight facilitates the formation, upgrading, and performance along GVCs.</p>","PeriodicalId":48453,"journal":{"name":"Journal of International Business Studies","volume":null,"pages":null},"PeriodicalIF":8.6000,"publicationDate":"2024-08-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of International Business Studies","FirstCategoryId":"91","ListUrlMain":"https://doi.org/10.1057/s41267-024-00719-1","RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS","Score":null,"Total":0}
引用次数: 0
Abstract
We show that shared and improved auditing standards, as induced by the audit oversight arising from the Public Company Accounting Oversight Board (PCAOB)’s inspections on non-U.S. auditors, help global exporting firms upgrade themselves and tap into global value chains (GVCs). Using a dataset of U.S. waterway imports from global suppliers of 36 countries, we find that PCAOB international inspections not only lead to significantly more exports to U.S. buyers, particularly for intermediate and capital goods, but exporters also upgrade their product complexity. These results are consistent with enhanced information quality of exporters and thus reduced informational frictions with downstream importers. Echoing this notion, we find stronger GVC effects of PCAOB inspections for exporters facing more informational problems, i.e., for those with ex-ante lower reporting quality or smaller market shares, and those located in countries with weaker institutions or higher geopolitical risk with the U.S. PCAOB inspections also increase the duration length of the chain relationship and supplier firms’ relationship-specific investments in the chain. We further find that U.S. importers with a greater share of suppliers audited by PCAOB-inspected auditors exhibit boosted financial outcomes. Overall, our findings suggest that audit oversight facilitates the formation, upgrading, and performance along GVCs.
期刊介绍:
The Selection Committee for the JIBS Decade Award is pleased to announce that the 2023 award will be presented to Anthony Goerzen, Christian Geisler Asmussen, and Bo Bernhard Nielsen for their article titled "Global cities and multinational enterprise location strategy," published in JIBS in 2013 (volume 44, issue 5, pages 427-450).
The prestigious JIBS Decade Award, sponsored by Palgrave Macmillan, recognizes the most influential paper published in the Journal of International Business Studies from a decade earlier. The award will be presented at the annual AIB conference.
To be eligible for the JIBS Decade Award, an article must be one of the top five most cited papers published in JIBS for the respective year. The Selection Committee for this year included Kaz Asakawa, Jeremy Clegg, Catherine Welch, and Rosalie L. Tung, serving as the Committee Chair and JIBS Editor-in-Chief, all from distinguished universities around the world.