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Emission rights mortgage and earnings management

Author

Listed:
  • Wang, Qun
  • Zhao, Xiangfang

Abstract

Utilizing Chinese A-share listed firms from 2008 to 2021, we examine the impact of emission rights mortgage (ERM) policy on firms’ earnings management practices. We find that ERM can significantly reduce earnings management. Moreover, cross-sectional analysis suggests that the main effect is more pronounced for non-SOEs, firms located in regions with higher levels of marketization, those in more competitive industries, and those facing more severe financial constraints. Our study offers valuable insights into the crucial role of ERM in shaping firms' earnings management activities.

Suggested Citation

  • Wang, Qun & Zhao, Xiangfang, 2024. "Emission rights mortgage and earnings management," Economics Letters, Elsevier, vol. 235(C).
    • Handle: RePEc:eee:ecolet:v:235:y:2024:i:c:s0165176524000454
    DOI: 10.1016/j.econlet.2024.111561
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    More about this item

    Keywords

    Emission rights mortgage; Earnings management; China;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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