Does foreign company's shortcut to Wall Street Cut short their Financial Reporting Quality? Evidence form Chinese Reverse Merger
We find that Chinese reverse merger (RM) firms exhibit lower financial reporting quality than U.S. RM firms, which in turn have poorer financial reporting quality than U.S. regular firms. These results indicate that the use of RM process is associated with poor financial reporting quality and the we...
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2012
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sg-smu-ink.soa_research-19872013-05-14T05:30:08Z Does foreign company's shortcut to Wall Street Cut short their Financial Reporting Quality? Evidence form Chinese Reverse Merger CHEN, Kun-chih CHENG, Qiang Chou Lin, Ying Chen Lin, Yu Xin, Xiao We find that Chinese reverse merger (RM) firms exhibit lower financial reporting quality than U.S. RM firms, which in turn have poorer financial reporting quality than U.S. regular firms. These results indicate that the use of RM process is associated with poor financial reporting quality and the weak legal enforcement on Chinese RM firms exacerbates the problem. Moreover, the financial reporting quality of Chinese RM firms is inferior to that of other Chinese firms listed in the U.S. Compared with other Chinese firms listed in the U.S., Chinese RM firms exhibit lower bonding incentives and poorer corporate governance. Overall, the results indicate that the RM process provides foreign firms that exhibit low bonding incentives and poor governance with a “shortcut” to Wall Street, leading to poor financial reporting quality. 2012-07-01T07:00:00Z text https://ink.library.smu.edu.sg/soa_research/988 Research Collection School Of Accountancy eng Institutional Knowledge at Singapore Management University Reverse mergers Chinese firms bonding hypothesis cross-listings financial reporting quality Accounting |
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Reverse mergers Chinese firms bonding hypothesis cross-listings financial reporting quality Accounting CHEN, Kun-chih CHENG, Qiang Chou Lin, Ying Chen Lin, Yu Xin, Xiao Does foreign company's shortcut to Wall Street Cut short their Financial Reporting Quality? Evidence form Chinese Reverse Merger |
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We find that Chinese reverse merger (RM) firms exhibit lower financial reporting quality than U.S. RM firms, which in turn have poorer financial reporting quality than U.S. regular firms. These results indicate that the use of RM process is associated with poor financial reporting quality and the weak legal enforcement on Chinese RM firms exacerbates the problem. Moreover, the financial reporting quality of Chinese RM firms is inferior to that of other Chinese firms listed in the U.S. Compared with other Chinese firms listed in the U.S., Chinese RM firms exhibit lower bonding incentives and poorer corporate governance. Overall, the results indicate that the RM process provides foreign firms that exhibit low bonding incentives and poor governance with a “shortcut” to Wall Street, leading to poor financial reporting quality. |
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text |
| author |
CHEN, Kun-chih CHENG, Qiang Chou Lin, Ying Chen Lin, Yu Xin, Xiao |
| author_facet |
CHEN, Kun-chih CHENG, Qiang Chou Lin, Ying Chen Lin, Yu Xin, Xiao |
| author_sort |
CHEN, Kun-chih |
| title |
Does foreign company's shortcut to Wall Street Cut short their Financial Reporting Quality? Evidence form Chinese Reverse Merger |
| title_short |
Does foreign company's shortcut to Wall Street Cut short their Financial Reporting Quality? Evidence form Chinese Reverse Merger |
| title_full |
Does foreign company's shortcut to Wall Street Cut short their Financial Reporting Quality? Evidence form Chinese Reverse Merger |
| title_fullStr |
Does foreign company's shortcut to Wall Street Cut short their Financial Reporting Quality? Evidence form Chinese Reverse Merger |
| title_full_unstemmed |
Does foreign company's shortcut to Wall Street Cut short their Financial Reporting Quality? Evidence form Chinese Reverse Merger |
| title_sort |
does foreign company's shortcut to wall street cut short their financial reporting quality? evidence form chinese reverse merger |
| publisher |
Institutional Knowledge at Singapore Management University |
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2012 |
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https://ink.library.smu.edu.sg/soa_research/988 |
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