This paper studies Chinese firms’earnings management strategy in response to the trade dispute investigations initiated by the U.S.from 2001 to 2018.This topic is important given the increasingly severe international...This paper studies Chinese firms’earnings management strategy in response to the trade dispute investigations initiated by the U.S.from 2001 to 2018.This topic is important given the increasingly severe international trade environment and the significant influence of macro economy on financial reporting.We find that firms affected by the U.S.-initiated trade dispute investigations engage in more upward earnings management.Additionally,the result is more pronounced in firms with a more negative market reaction around the announcement of the investigations.Cross-sectional tests provide evidence that the positive relation is stronger among firms whose U.S.operating revenue and management ownership is high,firms in provinces with weak investor protection,and firms that performed well one year after initiation of the investigations.Moreover,investors react positively to the earnings management by the affected firms.Our results are robust to a variety of sensitivity checks.Overall,our findings suggest that companies will manage their earnings upward to mitigate the negative impacts of the U.S.-initiated trade dispute investigations.展开更多
A World Trade Organization(WTO)panel report published on October 19 has ruled that the United States violated WTO rules in 13 anti-dumping measures imposed on imports from China.China’s Ministry of Commerce welcomed ...A World Trade Organization(WTO)panel report published on October 19 has ruled that the United States violated WTO rules in 13 anti-dumping measures imposed on imports from China.China’s Ministry of Commerce welcomed the ruling and urged the United States to respect the decision and rectify its trade remedies in order to ensure a fair international trade environment.The complaint,filed by China in December 2013,展开更多
基金support from National Natural Science Foundation of China (NSFC Project Numbers 71972049)
文摘This paper studies Chinese firms’earnings management strategy in response to the trade dispute investigations initiated by the U.S.from 2001 to 2018.This topic is important given the increasingly severe international trade environment and the significant influence of macro economy on financial reporting.We find that firms affected by the U.S.-initiated trade dispute investigations engage in more upward earnings management.Additionally,the result is more pronounced in firms with a more negative market reaction around the announcement of the investigations.Cross-sectional tests provide evidence that the positive relation is stronger among firms whose U.S.operating revenue and management ownership is high,firms in provinces with weak investor protection,and firms that performed well one year after initiation of the investigations.Moreover,investors react positively to the earnings management by the affected firms.Our results are robust to a variety of sensitivity checks.Overall,our findings suggest that companies will manage their earnings upward to mitigate the negative impacts of the U.S.-initiated trade dispute investigations.
文摘A World Trade Organization(WTO)panel report published on October 19 has ruled that the United States violated WTO rules in 13 anti-dumping measures imposed on imports from China.China’s Ministry of Commerce welcomed the ruling and urged the United States to respect the decision and rectify its trade remedies in order to ensure a fair international trade environment.The complaint,filed by China in December 2013,
