Confucian Culture and Accounting Information Quality

Posted: 18 Mar 2021

See all articles by Bo Cheng

Bo Cheng

Nanjing Audit University

Fei Pan

Shanghai University of Finance and Economics

Yang Xuan

affiliation not provided to SSRN

Date Written: February 22, 2016

Abstract

This paper links accounting information quality to Confucianism, the most prevalent traditional culture in China. We examine the relation between Confucian culture and accounting information quality by public data of the listed companies from 2007 to 2013. Results indicate that Confucian culture can significantly improve reliability of financial reports, as well as transparency of information disclosure, both economically and statistically. Results remain unchanged after we consider endogeneity problem and other robustness checks. This study contributes to the literature not only by enriching the corporate governance theory in which Chinese traditional culture was embedded, but also providing empirical evidence on the role of the informal institution, such as Confucianism in corporate governance.

Keywords: Confucian Culture, Accounting Information Quality, Financial Reports Reliability, Information Disclosure Transparency

JEL Classification: F0, F239, G02

Suggested Citation

Cheng, Bo and Pan, Fei and Xuan, Yang, Confucian Culture and Accounting Information Quality (February 22, 2016). Available at SSRN: https://ssrn.com/abstract=3790690

Bo Cheng (Contact Author)

Nanjing Audit University ( email )

Nanjing, Jiangsu 211815
China

Fei Pan

Shanghai University of Finance and Economics ( email )

777 Guoding Road
Shanghai, AK Shanghai 200433
China

Yang Xuan

affiliation not provided to SSRN

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