The effects of accounting conservatism on investment decision: Evidence from listed companies in China

Haixin Ma and Kyunbeom Jeong

Cogent Business & Management, 2022, vol. 9, issue 1, 2093484

Abstract: This study investigates the effect of accounting conservatism on corporate investment decisions in China. Specifically, we analyze how accounting conservatism affects a company’s investment decision-making. Furthermore, we examine the difference in this effect of accounting conservatism on investment decision between public and private companies. The results of the analysis are as follows. First, accounting for conservatism can suppress the occurrence of inefficient investments. In a full sample, a public company sample and a private company sample, it shows a negative relationship between accounting conservatism and excessive investment. Second, the deterrent effect of accounting conservatism on corporate inefficient investment in public companies is weaker than in private companies. With these results, we can conclude that even in a special environment like China, accounting conservatism can affect the investment activities of companies and this effect is different depending on the type of the company.

Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/23311975.2022.2093484 (text/html)
Access to full text is restricted to subscribers.

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:taf:oabmxx:v:9:y:2022:i:1:p:2093484

Ordering information: This journal article can be ordered from
http://cogentoa.tandfonline.com/journal/OABM20

DOI: 10.1080/23311975.2022.2093484

Access Statistics for this article

Cogent Business & Management is currently edited by Len Tiu Wright and Tahir Nisar

More articles in Cogent Business & Management from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().