Cautious and conscientious or fish in troubled waters: Knightian uncertainty and financial restatement

IF 6.9 2区经济学 Q1 BUSINESS, FINANCE

Research in International Business and Finance Pub Date : 2025-08-01 DOI:10.1016/j.ribaf.2025.103135

Tingting Ma , Duo Niu , Xizhe Fang , Xinyuan Ji , Ahmet Sensoy

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Abstract

Recently, the Knightian uncertainty triggered by frequent extreme events has exerted profound and lasting impacts on capital markets. This paper investigates the effect of Knightian uncertainty on corporate financial restatements, using data from Chinese A-share listed firms between 2007 and 2020. The findings show that Knightian uncertainty significantly increases the likelihood of financial restatements. Mechanism analysis indicates that addressing the capital market pressure induced by Knightian uncertainty is a key motivation for firms to engage in financial restatements. Heightened uncertainty also exacerbates information asymmetry and earnings management, with firms displaying opportunistic “fishing in muddy waters” behavior. Heterogeneity analysis highlights varying effects across firms with different characteristics and governance structures. This research enhances understanding of how Knightian uncertainty shapes corporate information environments and offers policy insights for stabilizing capital markets.

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谨慎谨慎或浑水摸鱼：骑士式的不确定性和财务重述

近年来，极端事件频发引发的奈特式不确定性对资本市场产生了深刻而持久的影响。本文利用2007 - 2020年中国a股上市公司的数据，研究了奈特不确定性对企业财务重述的影响。研究结果表明，奈特不确定性显著增加了财务重述的可能性。机制分析表明，解决由奈特不确定性引起的资本市场压力是企业进行财务重述的关键动机。不确定性的加剧也加剧了信息不对称和盈余管理，企业表现出机会主义的“浑水摸鱼”行为。异质性分析强调了具有不同特征和治理结构的公司之间的不同影响。本研究增进了对奈特不确定性如何塑造企业信息环境的理解，并为稳定资本市场提供了政策见解。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Research in International Business and Finance BUSINESS, FINANCE-

CiteScore

11.20

自引率

9.20%

发文量

240

期刊介绍： Research in International Business and Finance (RIBAF) seeks to consolidate its position as a premier scholarly vehicle of academic finance. The Journal publishes high quality, insightful, well-written papers that explore current and new issues in international finance. Papers that foster dialogue, innovation, and intellectual risk-taking in financial studies; as well as shed light on the interaction between finance and broader societal concerns are particularly appreciated. The Journal welcomes submissions that seek to expand the boundaries of academic finance and otherwise challenge the discipline. Papers studying finance using a variety of methodologies; as well as interdisciplinary studies will be considered for publication. Papers that examine topical issues using extensive international data sets are welcome. Single-country studies can also be considered for publication provided that they develop novel methodological and theoretical approaches or fall within the Journal''s priority themes. It is especially important that single-country studies communicate to the reader why the particular chosen country is especially relevant to the issue being investigated. [...] The scope of topics that are most interesting to RIBAF readers include the following: -Financial markets and institutions -Financial practices and sustainability -The impact of national culture on finance -The impact of formal and informal institutions on finance -Privatizations, public financing, and nonprofit issues in finance -Interdisciplinary financial studies -Finance and international development -International financial crises and regulation -Financialization studies -International financial integration and architecture -Behavioral aspects in finance -Consumer finance -Methodologies and conceptualization issues related to finance