Returnee directors and corporate fraud

Muhammad Usman, Ernest Gyapong, Henry Agyei-Boapeah and Junming Yin ()
Additional contact information
Muhammad Usman: Xijing University
Ernest Gyapong: Alfaisal University
Henry Agyei-Boapeah: University of Essex
Junming Yin: Nanjing University of Information Science & Technology

Review of Accounting Studies, 2025, vol. 30, issue 3, No 15, 2822-2867

Abstract: Abstract Using a dataset of Chinese listed firms, we examine the relationship between Chinese nationals with foreign experience serving as directors (i.e., returnee directors) and the incidence of corporate fraud. We find a significantly negative relationship between returnee directors and fraud. Further, relative to foreign and independent directors, returnee directors do more than other directors in constraining firms’ fraud. These results are robust to endogeneity concerns addressed through propensity score matching and the Oster (2019) test. Further analyses show that the negative relationship between returnee directors and fraud is more pronounced when the returnees (i) have practical overseas work experience, (ii) work in conservative regions of China where the people are more culturally sensitive, and (iii) are appointed as independent directors. Collectively, the findings imply that technical skillset alone is insufficient for effective monitoring; the ability to work in a culturally sensitive manner and maintain professional independence are equally necessary.

Keywords: Returnee directors; Foreign experience; Foreign directors; Independent directors; Fraud; Emerging market (search for similar items in EconPapers)
JEL-codes: G34 M40 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11142-025-09878-4 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:reaccs:v:30:y:2025:i:3:d:10.1007_s11142-025-09878-4

Ordering information: This journal article can be ordered from
http://www.springer.com/accounting/journal/11142

DOI: 10.1007/s11142-025-09878-4

Access Statistics for this article

Review of Accounting Studies is currently edited by Paul Fischer

More articles in Review of Accounting Studies from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().