 Examining the spread of high quality reporting through the corporate networkRobert Felix Advances in accounting, 2016, vol. 32, issue C, 31-41 Abstract: This paper explores whether high reporting quality spreads through the network formed by shared directors. Consistent with the notion that positive information is generally less impactful than negative information in affecting behavior, I find that a firm's own reporting quality is not affected by sharing a director with a firm that is considered to have high reporting quality. However, I find that a firm's reporting quality improves when the firm shares a director with a high reporting quality firm and a firm that is highly connected in the network (i.e.: central). The results suggest that high reporting quality needs the endorsement of a high status firm such as a central firm to travel through the network. Furthermore, firms that are susceptible to poor reporting are the most receptive to the high reporting quality signal coming through central firms. Altogether, this study documents that central firms are in a position to initiate positive reporting contagion. Keywords: Board interlocks; Firm centrality; Reporting quality; Network; Audit committee (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:advacc:v:32:y:2016:i:c:p:31-41 DOI: 10.1016/j.adiac.2016.01.001 Access Statistics for this article Advances in accounting is currently edited by Dennis Caplan More articles in Advances in accounting from Elsevier |
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