Reputational penalties for different types of corporate scandals in China.
This study investigates reputational penalties for two main types of corporate scandals in China: accounting scandal vs. corruption. Compared with U.S. firms that experienced an average of 41% drop in firm value if accounting scandal was disclosed, I find that accounting scandals are less destructiv...
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ndltd-cuhk.edu.hk-oai-cuhk-dr-cuhk_3445742019-02-19T03:39:34Z Reputational penalties for different types of corporate scandals in China. 中国上市公司丑闻对公司价值毀损研究 CUHK electronic theses & dissertations collection Zhongguo shang shi gong si chou wen dui gong si jia zhi hui sun yan jiu Business enterprises--Corrupt practices Business enterprises--Corrupt practices--China Corporations--Accounting--Corrupt practices Corporations--Accounting--Corrupt practices--China Scandals Scandals--China Stock companies Stock companies--China This study investigates reputational penalties for two main types of corporate scandals in China: accounting scandal vs. corruption. Compared with U.S. firms that experienced an average of 41% drop in firm value if accounting scandal was disclosed, I find that accounting scandals are less destructive to firm value in a relationship-based economy such as China. However, while pure accounting scandals are relatively innocuous in China, I find that corruption charges against the firms' senior executives have serious consequences. I explore several explanations for such difference in market reaction to the two types of scandals, including political network effect, accounting write-off effect, corporate governance effect, incentive effect, and executive turnover effect. My empirical evidence provides consistent support to the political relationship explanation which indicates that the damaged social and political networks and the ability to contract caused by the corruption charges would have a more negative impact on firms' operations and performances. Although my results do not fully eliminate all the other alternative explanations, they are likely to be a less important reason for the stronger reputation penalties for corruption charges than accounting scandals in China. Zhang, Fang. Adviser: T.J. Wang. Source: Dissertation Abstracts International, Volume: 72-11, Section: A, page: . Thesis (Ph.D.)--Chinese University of Hong Kong, 2009. Includes bibliographical references (leaves 60-61). Electronic reproduction. Hong Kong : Chinese University of Hong Kong, [2012] System requirements: Adobe Acrobat Reader. Available via World Wide Web. Electronic reproduction. [Ann Arbor, MI] : ProQuest Information and Learning, [201-] System requirements: Adobe Acrobat Reader. Available via World Wide Web. Abstract also in Chinese. Zhang, Fang Chinese University of Hong Kong Graduate School. Division of Business Administration. 2009 Text theses electronic resource microform microfiche 1 online resource (vii, 61 leaves : ill. (some col.)) cuhk:344574 isbn: 9781124887371 http://library.cuhk.edu.hk/record=b6074941 eng chi China China China China Use of this resource is governed by the terms and conditions of the Creative Commons “Attribution-NonCommercial-NoDerivatives 4.0 International” License (http://creativecommons.org/licenses/by-nc-nd/4.0/) http://repository.lib.cuhk.edu.hk/en/islandora/object/cuhk%3A344574/datastream/TN/view/Reputational%20penalties%20for%20different%20types%20of%20corporate%20scandals%20in%20China.jpghttp://repository.lib.cuhk.edu.hk/en/item/cuhk-344574 |
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English Chinese |
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Business enterprises--Corrupt practices Business enterprises--Corrupt practices--China Corporations--Accounting--Corrupt practices Corporations--Accounting--Corrupt practices--China Scandals Scandals--China Stock companies Stock companies--China |
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Business enterprises--Corrupt practices Business enterprises--Corrupt practices--China Corporations--Accounting--Corrupt practices Corporations--Accounting--Corrupt practices--China Scandals Scandals--China Stock companies Stock companies--China Reputational penalties for different types of corporate scandals in China. |
description |
This study investigates reputational penalties for two main types of corporate scandals in China: accounting scandal vs. corruption. Compared with U.S. firms that experienced an average of 41% drop in firm value if accounting scandal was disclosed, I find that accounting scandals are less destructive to firm value in a relationship-based economy such as China. However, while pure accounting scandals are relatively innocuous in China, I find that corruption charges against the firms' senior executives have serious consequences. I explore several explanations for such difference in market reaction to the two types of scandals, including political network effect, accounting write-off effect, corporate governance effect, incentive effect, and executive turnover effect. My empirical evidence provides consistent support to the political relationship explanation which indicates that the damaged social and political networks and the ability to contract caused by the corruption charges would have a more negative impact on firms' operations and performances. Although my results do not fully eliminate all the other alternative explanations, they are likely to be a less important reason for the stronger reputation penalties for corruption charges than accounting scandals in China. === Zhang, Fang. === Adviser: T.J. Wang. === Source: Dissertation Abstracts International, Volume: 72-11, Section: A, page: . === Thesis (Ph.D.)--Chinese University of Hong Kong, 2009. === Includes bibliographical references (leaves 60-61). === Electronic reproduction. Hong Kong : Chinese University of Hong Kong, [2012] System requirements: Adobe Acrobat Reader. Available via World Wide Web. === Electronic reproduction. [Ann Arbor, MI] : ProQuest Information and Learning, [201-] System requirements: Adobe Acrobat Reader. Available via World Wide Web. === Abstract also in Chinese. |
author2 |
Zhang, Fang |
author_facet |
Zhang, Fang |
title |
Reputational penalties for different types of corporate scandals in China. |
title_short |
Reputational penalties for different types of corporate scandals in China. |
title_full |
Reputational penalties for different types of corporate scandals in China. |
title_fullStr |
Reputational penalties for different types of corporate scandals in China. |
title_full_unstemmed |
Reputational penalties for different types of corporate scandals in China. |
title_sort |
reputational penalties for different types of corporate scandals in china. |
publishDate |
2009 |
url |
http://library.cuhk.edu.hk/record=b6074941 http://repository.lib.cuhk.edu.hk/en/item/cuhk-344574 |
_version_ |
1718977646982856704 |