Does Foreign Company's Shortcut to Wall Street Cut Short their Financial Reporting Quality? Evidence from Chinese Reverse Mergers

• Main Author: CHEN, Kun-chih
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2012
• Subjects: Reverse mergers; Chinese firms; bonding hypothesis; cross-listings; financial reporting quality; Accounting
• Online Access: https://ink.library.smu.edu.sg/soa_research/1057; http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2043899
• Institution: Singapore Management University

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...