The effect of governance transparency on earnings response coefficient: evidence from emerging markets
by Minyue Dong, Qingmei Xue
International Journal of Accounting, Auditing and Performance Evaluation (IJAAPE), Vol. 6, No. 2/3, 2010

Abstract: This study examines whether the earnings response coefficient (ERC) is conditional on the transparency of corporate governance (CG) in emerging markets. Using 81 of the top 100 Chinese firms that are listed either in mainland China or in Hong Kong, we find that the level of governance transparency positively interacts with ERC. This finding is generally robust to controls for various firm specifications (size, assets growth, leverage, E/P ratio) and institutional factors (listing place, issuing status, and economic sector). The predicted model is tenable even if we change earnings metrics and window settings. Our refined analysis using five subcategories of governance scores indicates that the interaction of governance transparency on ERC is mostly contributed by information disclosure on shareholders and related parties, two types of governance information that concern investors. The alternative test using governance structural variables further shows that the relation of ERC is not significantly conditional on the CG structure.

Online publication date: Mon, 15-Feb-2010

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Accounting, Auditing and Performance Evaluation (IJAAPE):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com