We study how secular culture affects firm behavior when formal institutions fall short. We find that firms more exposed to alcohol-related sin culture exhibit more earnings management and lean their operations more toward local business partners. Tests using latitude and snow/temperature as...

We examine the impact of earnings management uncertainty (EMU) on bond yield spreads in China. In the process, we decompose the bond yield spread into liquidity and default yield spreads. The findings suggest that EMU primarily drives the default yield spread of a corporate bond and that its...

We study the impact of short sales on accrual-based and real earnings management (EM). Based on the costs and benefits of using EM to hide negative information, we derive an analytical model showing that there are two possibilities: 1) a firm engages in less accrual-based and real EM when facing...