The impact of cross-listing on earnings management and its economic consequence: evidence from China

Qiaoyu Jia and Jia’Nan Zhou

Asia-Pacific Journal of Accounting & Economics, 2022, vol. 29, issue 2, 502-522

Abstract: This study empirically examines the effect of cross-listing on earnings management and its economic consequences using A + H cross-listed company data from China. Considering both accrual-based earnings management (AEM) and real earnings management (REM) and modifying reported performance to obtain true performance, we use path analysis to find that cross-listing can reduce AEM, thereby damaging firm performance, and can reduce REM, thereby benefiting firm performance. We further examine the mechanism of benefit of earnings management. The results reveal that AEM can maintain debt contract efficiency and REM plays a role in signaling better performance.

Date: 2022
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DOI: 10.1080/16081625.2019.1600414

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Asia-Pacific Journal of Accounting & Economics is currently edited by Yin-Wong Cheung, Hong Hwang, Jeong-Bon Kim, Shu-Hsing Li and Suresh Radhakrishnan

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