Perks and the informativeness of stock prices in the Chinese market

Ferdinand Gul (), Louis T.W. Cheng and T.Y. Leung

Journal of Corporate Finance, 2011, vol. 17, issue 5, 1410-1429

Abstract: While the literature shows that perks can affect firm values positively or negatively, we argue that firms with higher perks are more likely to be associated with a lower quality of financial reporting, which, in turn, can affect the informativeness of stock prices. Based on hand-collected data on perks from Chinese listed firms, we find that firms with lower perks are associated with higher informativeness of stock prices (or lower R-square). Moreover, the positive association between perks and R-square is shown to be weaker for firms with higher financial reporting quality through audit and earnings quality measures.

Keywords: Perks; Auditor quality; Earnings quality; R-square (search for similar items in EconPapers)
JEL-codes: G14 G34 M42 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (63)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:17:y:2011:i:5:p:1410-1429

DOI: 10.1016/j.jcorpfin.2011.07.005

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