Journal of Asian Business and Economic Studies
Vol. 28(1) , March 2021, Page 02-19


Earnings quality and crash risk in China: an integrated analysis
Udomsak Wongchoti & Ge Tian & Wei Hao & Yi Ding & Hongfeng Zhou

DOI: 10.1108/JABES-02-2020-0012
Abstract
Purpose - The authors provide a comprehensive empirical examination on the impact of earnings quality on stock price crash risk in China. Design/methodology/approach - The authors acknowledge and distinguish two-dimensional proxies for earnings quality – accounting-based (earnings management degree) and market-based (earnings transparency) known in accounting and finance literature. Findings - The authors find that both generally indicate that better earnings quality is associated with less crashes. However, extremely high earnings transparency interacted with insider trading profit can also actually exacerbate stock price crashes. Originality/value - This study is the first to highlight the pertinence of accounting-based measures to proxy for earnings quality in a fast-growing emerging market environment such as China.

Keywords
Stock price crash risk, Earnings quality, China
Corporate diversification and firms' value in emerging economy: The role of growth opportunity
2020, Journal of Asian Business and Economic Studies More

Board governance quality and risk disclosure compliance among financial institutions in Uganda
2021, Journal of Asian Business and Economic Studies More

Does information asymmetry lead to higher debt financing? Evidence from China during the NTS Reform period
2020, Journal of Asian Business and Economic Studies More

Innovation of impairment loss allowance model of Indonesian financial accounting standards 71
2020, Journal of Asian Business and Economic Studies More

Corporate governance, pyramid ownership, and firm value: Evidence from Vietnam
2020, Journal of Asian Business and Economic Studies More