Based on 16,604 observations between 1994 and 2006, this study revisits the “horizon problem” by examining how CEO retirement affects conditional accounting conservatism. We hypothesize and find that firms become less conservative in their financial reporting before the retirement of their...

One of the most notable changes that economic reform in China has brought about is the revival of its accounting profession. The rapid development of independent auditing over the past two decades has been phenomenal, and from 1995 to 2000, about 15% of listed Chinese companies received modified...

Henrich and colleagues (2010) summarized cultural differences in psychology and argued that people from one particular culture are outliers: people from societies that are Western, Educated, Industrialized, Rich, and Democratic (WEIRD). In this study, we show that liberals think WEIRDer than...

Cross-cultural psychologists have mostly contrasted East Asia with the West. However, this study shows that there are psychological differences within China almost as large as differences between East and West. We propose that a history of farming rice makes cultures more interdependent, while...

The extant corporate investment literature has documented that information asymmetry and agency conflicts between managers and outside investors prevent firms from making optimal investment decisions. In this study, we investigate whether government intervention, as another form of friction,...