Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/289171 
Year of Publication: 
2020
Citation: 
[Journal:] Journal of Business Economics [ISSN:] 1861-8928 [Volume:] 90 [Issue:] 5-6 [Publisher:] Springer [Place:] Berlin, Heidelberg [Year:] 2020 [Pages:] 879-916
Publisher: 
Springer, Berlin, Heidelberg
Abstract: 
The literature provides evidence on the separate roles of injunctive and descriptive norms in explaining corporate financial reporting, ignoring that descriptive norms are likely endogenous and partly explained by injunctive norms. We jointly analyze the direct and indirect effects of religious social norms (an injunctive norm) via local crime rates (a descriptive norm) on financial reporting quality. We find that religious social norms relate negatively to corporate earnings management and tax avoidance. We also show that this association is partially explained by crime rates in the firm’s geographical environment, underlining the indirect relation between religious social norms and financial reporting quality. Overall, the study highlights the importance of considering the interrelations between injunctive and descriptive norms when analyzing the effect of norms on corporate decision-making.
Subjects: 
Injunctive norms
Religion
Descriptive norms
Crime
Earnings management
Tax avoidance
JEL: 
D22
M14
M40
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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