{"title":"Housing prices and labor cost stickiness: Evidence from China","authors":"Suyan Yan, Chang Tong, Qiliang Liu","doi":"10.1016/j.jcae.2025.100454","DOIUrl":"10.1016/j.jcae.2025.100454","url":null,"abstract":"<div><div>Based on firm-level data from 2007 to 2020, this study examines the influence of housing prices on labor cost stickiness. The results show that housing prices strengthen firms’ labor cost stickiness. The strengthening effect is particularly pronounced in high-tech industries and during periods of high economic policy uncertainty. Moreover, as the observation period extends, the impact of housing prices on labor cost stickiness diminishes. Further analysis reveals that housing prices have a reinforcing effect on stickiness in terms of employee numbers, with no significant impact on per capita remuneration stickiness. This study indicates that a company will need to allocate additional resources toward investment in machinery and equipment to address the labor cost stickiness stemming from the housing price surge.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 1","pages":"Article 100454"},"PeriodicalIF":2.9,"publicationDate":"2025-01-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143160677","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Seeing is believing: Director accounting enforcement experience and financial reporting quality","authors":"Silver Chung , Daniel Sejun Hwang","doi":"10.1016/j.jcae.2024.100453","DOIUrl":"10.1016/j.jcae.2024.100453","url":null,"abstract":"<div><div>This study investigates the impact of directors’ experiences with accounting enforcement on financial reporting quality (FRQ). While firms often regard real-life experiences as a crucial factor in their hiring decisions, the actual impact of directors’ experiences on corporate decisions, particularly financial reporting decisions remains unclear. Using a difference-in-differences method, we find significant changes in a firm’s FRQ when its director experiences SEC enforcement at another firm where she serves as a director. More specifically, we find that discretionary accruals and restatement likelihood decrease while real activities manipulation increases following a director’s Accounting and Auditing Enforcement Releases (AAER) experience. Additionally, such changes are concentrated among subsamples where AAERs allege fraud or GAAP violations, or the director serves on the audit committee at the perpetrating company. Collectively, these findings show that directors’ experiences make differences in related corporate decision-making and SEC enforcement actions have disciplinary effects beyond the firms that directly face charges.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 1","pages":"Article 100453"},"PeriodicalIF":2.9,"publicationDate":"2024-12-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143160674","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Carbon emission regulation and corporate financing constraints: A quasi-natural experiment based on China’s carbon emissions trading mechanism","authors":"Pengcheng Zhang , Jiayin Qi","doi":"10.1016/j.jcae.2024.100452","DOIUrl":"10.1016/j.jcae.2024.100452","url":null,"abstract":"<div><div>This study empirically investigates the impact of carbon emissions trading on corporate financing constraints using a difference-in-differences model. By compiling lists of emission-controlled enterprises from each pilot carbon market, this study demonstrates that carbon emissions trading significantly increases financing constraints for these enterprises. However, no significant regional or sectoral spillover effects are observed. The results of the mechanism testing show that carbon emissions trading diminishes enterprise performance in the stock market and exerts adverse effects on the scale of corporate bank borrowing and the debt maturity structure. Further research reveals that good corporate governance and better information quality can inhibit the adverse effects of carbon emissions trading. This mechanism reduces firms’ investment expenditures, but increases their investments in research and development and financial asset allocation. Notably, despite financing constraints being detrimental to innovation, carbon emissions trading significantly enhances both the level and quality of innovation in firms. These findings underscore the complex effects of carbon emissions trading on corporate financing constraints and highlight the intricate nature of environmental policies at the microeconomic level.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 1","pages":"Article 100452"},"PeriodicalIF":2.9,"publicationDate":"2024-12-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143160697","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Does air pollution matter for audit process and audit outcomes? Evidence from China","authors":"Yaqian Wu , Jiyuan Li","doi":"10.1016/j.jcae.2024.100451","DOIUrl":"10.1016/j.jcae.2024.100451","url":null,"abstract":"<div><div>We investigate the impact of air pollution on audit process and audit outcomes using unique data from the Chinese capital market between 2013 and 2020. We find that auditors exert less effort in client firms located in cities with severe air pollution, leading to lower audit quality represented by a lower probability of and fewer audit adjustments. The cross-sectional analysis shows that auditors from Big 4 audit firms can mitigate the effect of air pollution on audit effort and audit quality. We also draw some interesting conclusions about the effect of auditors’ perceptions of air pollution variation in both spatial and time dimensions, and the impact of COVID-19. Our findings still hold in several robustness checks such as using alternative proxies, controlling for more fixed effects, considering mutual selection issues, employing regression discontinuity design, utilizing instrument variables method, and conducting placebo tests. Our study contributes to the emerging literature on behavioral finance by extending the research into ambient air pollution to the auditing context, provides new insights into the determinants of audit effort and audit quality, and has some implications for regulators.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 1","pages":"Article 100451"},"PeriodicalIF":2.9,"publicationDate":"2024-12-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143160676","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The unintended consequences of targeted poverty alleviation: Evidence from China","authors":"Jing Zhou , Lili Jiu , Oupin Tang , Po-Hsiang Yu","doi":"10.1016/j.jcae.2024.100450","DOIUrl":"10.1016/j.jcae.2024.100450","url":null,"abstract":"<div><div>This study examines the effect of corporate targeted poverty alleviation (TPA) activities endorsed by Chinese governments on audit outcomes. We find that firms engaging in TPA activities are less likely to receive modified audit opinions (MAOs) relative to those without TPA activities and more TPA investments induce less MAO issuance, documenting an unintentional beneficial consequence of TPA. These findings are robust to a battery of sensitivity tests, including addressing endogeneity issues and ruling out the alternative explanation. Our cross-sectional results show that the negative relation between TPA and MAOs is more significant for firms audited by non-industry specialists and short-tenure auditors, non-state-owned enterprises (non-SOEs), and labor-intensive firms. We perform the mediation analyses and identify three potential channels- improved operating performance, enhanced information disclosure quality, and elevated reputation- through which TPA engagements influence the likelihood of receiving MAOs. Moreover, we find industrial development TPA has a more pronounced effect on audit outcomes due to its positive impact on firms’ business operations. Overall, our research documents an unintended consequence of firms’ TPA initiatives in mitigating audit risk. As a vital facet of policy-oriented CSR, TPA engagements exhibit unique characteristics compared to other CSR perspectives. Given its economic relevance and political features, our study contributes to this stream of research and offers implications for TPA initiatives.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 1","pages":"Article 100450"},"PeriodicalIF":2.9,"publicationDate":"2024-11-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143160679","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Wenxuan Huang , Weidong Xu , Donghui Li , Jiancheng (Duncan) Liu
{"title":"Expanded auditor’s reports and voluntary disclosure","authors":"Wenxuan Huang , Weidong Xu , Donghui Li , Jiancheng (Duncan) Liu","doi":"10.1016/j.jcae.2024.100443","DOIUrl":"10.1016/j.jcae.2024.100443","url":null,"abstract":"<div><div>Employing a panel sample of 5,090 firm-years from 981 UK firms during the period from 2010 to 2016, we investigate the impact of the implementation of expanded auditor’s reports (EARs) on corporate voluntary disclosure. We find that the likelihood and frequency of voluntary disclosure significantly decrease after the implementation of EARs. In addition, the <em>total</em> number of risks of material misstatement (RMMs) has no impact on voluntary disclosure after the implementation of EARs, while certain RMMs categories (i.e., entity rather than account risks, and firm-specific rather than industry-level risks) display a more pronounced impact on corporate voluntary disclosure. In further analysis, we find that the mandatory adoption of EARs increases the proportion of long-term forecasts, riches the content of voluntary disclosure, and elicits a more positive market response to the announcement of voluntary disclosure. Cross-sectional analyses show that the impact of the implementation of EARs on voluntary disclosure can be magnified by a higher level of media coverage, especially breaking news coverage. Our results remain valid after considering various robustness tests and selection bias concerns.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"20 3","pages":"Article 100443"},"PeriodicalIF":2.9,"publicationDate":"2024-10-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142533490","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
K. Hung Chan , Miao He , Phyllis Lai Lan Mo , Weiyin Zhang
{"title":"Long-term tax strategy and corporate acquisition payment structure: An analysis based on the book-tax tradeoff theory","authors":"K. Hung Chan , Miao He , Phyllis Lai Lan Mo , Weiyin Zhang","doi":"10.1016/j.jcae.2024.100442","DOIUrl":"10.1016/j.jcae.2024.100442","url":null,"abstract":"<div><div>This study examines the relationship between corporate acquirers’ long-term tax strategy (i.e., past behavior) and their subsequent choice of an acquisition payment method (i.e., future behavior) based on a book-tax tradeoff analysis. We find that acquirers with a high (low) level of long-term tax avoidance are more likely to have cash (stock)-financed acquisitions. Political influence attenuates the significance of the above relationship. Among the acquirers who use cash-financed payment method, those who are less tax aggressive tend to include debt to finance their acquisitions, suggesting that debt and non-debt tax shields are substitutes for each other in acquisitions.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"20 3","pages":"Article 100442"},"PeriodicalIF":2.9,"publicationDate":"2024-09-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142357106","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Dividend signalling and investor protection: An international comparison","authors":"Xiaotong Deng , Sander De Groote , Chao Kevin Li","doi":"10.1016/j.jcae.2024.100441","DOIUrl":"10.1016/j.jcae.2024.100441","url":null,"abstract":"<div><p>This study examines whether dividend changes signal future earnings growth in non-US markets following the Ham et al. (2020) methodology and whether the strength of the earnings signal varies with the level of investor protection. Based on the notion that weak investor protection reduces the cost of cutting dividends and as such increases managers’ discretion to change dividends, we expect that the strength of the earnings signal in dividend increases becomes weaker as investor protection decreases. In a sample drawn from 38 different markets, our results indicate while dividends can signal future earnings in non-US markets, the strength of the signal is weaker than that in the US. In line with our predictions, we find that for firms in a strong investor protection environment, dividend changes are correlated more strongly with subsequent earning changes than is the case for firms in weak investor protection environments.</p></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"20 3","pages":"Article 100441"},"PeriodicalIF":2.9,"publicationDate":"2024-09-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S1815566924000419/pdfft?md5=e829392218254f8682343d76aabe8643&pid=1-s2.0-S1815566924000419-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142164236","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"MD&A tone and stock returns","authors":"Wenjun Xue , Zhongzhi He , FeiFei Wang","doi":"10.1016/j.jcae.2024.100440","DOIUrl":"10.1016/j.jcae.2024.100440","url":null,"abstract":"<div><p>This paper examines the impact of the MD&A (Management’s Discussion and Analysis) tone on cross-sectional stock returns in the unique context of Chinese A-share companies. We find a significant and positive relationship between the MD&A tone and Chinese stock returns after controlling for quantitative financial metrics. Our results suggest that the MD&A tone provides additional value that further enhances the information quality in MD&A disclosures and market responses. Furthermore, we observe that the textual tone effect is more pronounced for firms with lower institutional ownership, lower financial transparency, in less competitive market environments, and both the information factor and the sentiment factor of MD&A tone positively affect stock returns. Thus, we provide convincing evidence that MD&A narratives can serve as an effective communication tool to facilitate disclosure and mitigate information asymmetry between corporations and investors.</p></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"20 3","pages":"Article 100440"},"PeriodicalIF":2.9,"publicationDate":"2024-08-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142098373","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The bright side of staggered boards: Evidence from labor investment efficiency","authors":"Anh-Tuan Le , Henry Hongren Huang , Trung K. Do","doi":"10.1016/j.jcae.2024.100439","DOIUrl":"10.1016/j.jcae.2024.100439","url":null,"abstract":"<div><p>Using U.S. data from 1983 to 2015, we document that firms with staggered boards exhibit greater labor investment efficiency, measured as less abnormal net hiring, including over-investment (over-hiring and under-firing) and under-investment (under-hiring). A path analysis shows that 8.3% of the total effect of staggered boards on labor investment efficiency is explained by the positive effect of staggered boards on institutional ownership. Overall, our results support the view that staggered boards strengthen managers’ commitment to long-term shareholders’ interests, thereby encouraging managerial efforts to boost labor investment efficiency.</p></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"20 3","pages":"Article 100439"},"PeriodicalIF":2.9,"publicationDate":"2024-08-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141998293","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}