Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/338551 
Year of Publication: 
2024
Citation: 
[Journal:] China Journal of Accounting Studies (CJAS) [ISSN:] 2169-7221 [Volume:] 12 [Issue:] 4 [Year:] 2024 [Pages:] 908-934
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
This study integrates the multilateral punishment mechanism theory with the characteristics of Chinese society-"acquaintance," "face," and "relationship"-to analyze and test the governance mechanism of merchant gangs on earnings management for the first time. Findings reveal that (1) merchant gangs significantly reduce earnings management in Chinese listed companies, holding after various robustness checks; (2) companies more influenced by merchant gang governance face harsher multilateral punishments upon exposure of financial misconduct, with more complete conditions strengthening this effect; (3) merchant gangs have a stronger governance impact on firms with native management, and formal institutions enhance their governance role. This research provides empirical evidence for the multilateral punishment mechanism theory and contributes to understanding merchant gang governance in China.
Subjects: 
earnings management
formal institutions
Merchant gang governance
multilateral punishment mechanism
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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