Published in:INSEAD Working Paper ; No. 2022/39/FIN
Extent:
1 Online-Ressource (80 p)
Language:
English
DOI:
10.2139/ssrn.4143966
Identifier:
Origination:
Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments June 23, 2022 erstellt
Description:
We examine whether information manipulation by firms may reflect fundamental cooperation conventions induced by social norms in China. Consistent with this notion, we find that China’s leading social norms related to alcohol consumption and social drinking enhance earnings manipulation. An analysis of toxic alcohol scandals supports a causal interpretation. Further evidence suggests that the influence of alcohol may come from the negative externality it creates, which is propagated by corporate leaders and can be attenuated only by government campaigns rather than market-oriented institutions. Our results manifest a social norm externality that may resist market-based cooperation, which has important normative implications