In emerging markets, the concentration of corporate ownership has created agency conflicts between controlling owners and minority shareholders. Conventional corporate control mechanisms such as boards of directors and takeovers are typically weak in containing the agency problem. This study...

In an effort to increase the credibility of financial information in its emerging capital markets, China recently adopted rigorous new auditing standards designed to increase auditor independence. Consistent with increased auditor independence, we find that the frequency of modified opinions...

This paper examines the earnings patterns of initial public offering (IPO) firms in China to shed light on the role of earnings management in the quot;financial packagingquot; of Chinese state-owned enterprises (SOEs) for public listing. We base our analysis on the case of B-Shares and H-Shares...

Loughran and Ritter (1995) document that firms issuing seasoned equity offerings (SEOs) severely underperform the stock market for three to five years after the offering. Our paper examines the hypothesis that SEO investors are too optimistic because they naively extrapolate earnings trends...

This paper compares the value of political ties and market credibility in China by examining the consequence of corporate scandals. We categorize Chinese corporate scandals by whether the scandal is primarily associated with the destruction of i) the firm’s political networks (political...