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Earnings credibility in politically connected family firms

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  • Bona-Sánchez, Carolina
  • Pérez-Alemán, Jerónimo
  • Santana-Martín, Domingo Javier

Abstract

We investigate whether politically connected family firms provide the market with more or less credible earnings compared with unconnected family firms. Our results evidence that politically connected family firms show higher earnings informativeness than unconnected family firms. Our findings are consistent with the market perceiving that, in the presence of political ties, family firms are more likely to reduce information asymmetries by signalling their superior earnings quality.

Suggested Citation

  • Bona-Sánchez, Carolina & Pérez-Alemán, Jerónimo & Santana-Martín, Domingo Javier, 2019. "Earnings credibility in politically connected family firms," The British Accounting Review, Elsevier, vol. 51(3), pages 316-332.
    • Handle: RePEc:eee:bracre:v:51:y:2019:i:3:p:316-332
    DOI: 10.1016/j.bar.2018.12.003
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