Earnings credibility in politically connected family firms

Carolina Bona-Sánchez, Jerónimo Pérez-Alemán and Domingo Javier Santana-Martín

The British Accounting Review, 2019, vol. 51, issue 3, 316-332

Abstract: We investigate whether politically connected family firms provide the market with more or less credible earnings compared with unconnected family firms. Our results evidence that politically connected family firms show higher earnings informativeness than unconnected family firms. Our findings are consistent with the market perceiving that, in the presence of political ties, family firms are more likely to reduce information asymmetries by signalling their superior earnings quality.

Keywords: Family control; Political ties; Earnings informativeness; Signalling theory; Bonding mechanisms (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:bracre:v:51:y:2019:i:3:p:316-332

DOI: 10.1016/j.bar.2018.12.003

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