Is cross-listing a panacea for improving earnings quality? The case of H- and B-share firms in China

O Arslan-Ayaydin (First Author), S Chen, SX Ni (Participant Author), J Thewissen (Participant Author)

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摘要

This study examines whether cross-listed Chinese H- and B-share firms exhibit higher earnings quality relative to non-cross-listed A-share firms based on seven accounting- and market-based earnings quality attributes, including accrual quality, persistence, predictability, smoothness, conservatism, timeliness and value relevance. We find that earnings quality does not differ between cross-listed and non-cross listed firms in terms of accrual quality, timeliness and value relevance, and that H- and B-share firms report earnings with lower quality in terms of persistence and predictability. We also find that the B-firms report smoother earnings, while the H-firms report more conservative earnings. The results of a battery of cross-sectional, endogeneity and sensitivity analyses either confirm our primary findings of no earnings quality difference or reveal lower earnings quality for cross-listed firms than for non-cross-listed firms. Considering that cross-listing in China is primarily driven by government decisions, our findings suggest that, without proper incentives, cross-listing is not likely to be a panacea for higher quality financial reporting.
源语言英语
文章编号102113
页数16
期刊International Review of Financial Analysis
81
DOI
出版状态已出版 - 5月 2022

Corresponding author email

nserene@shu.edu.cn

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  • ABDC-A
  • SSCI

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