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Do powerful CEOs affect qualitative financial disclosure? Evidence from accounting comparability

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  • Majeed, Muhammad Ansar
  • Xie, Shilei
  • Ullah, Irfan
  • Fu, Jianru
  • Wang, Chunlin

Abstract

This study investigates the relationship between CEO power and financial statement comparability. Using a sample of A-listed Chinese firms for 2005–2020, we document a positive relationship between powerful CEOs and comparability. We further examined the impact of media coverage on comparability and its moderating role in the relationship between CEO power and comparability. Our results suggest that media coverage leads to higher comparability and reinforces the positive association between powerful CEO and comparability. Additionally, the positive association between CEO power and comparability is contingent on the gender of CEOs and is reversed under higher economic policy uncertainty. Our findings support the transparency argument, the quiet life hypothesis, and the media’s governance role. These results are robust to alternative measures of CEO power, comparability, econometric methods, and endogeneity.

Suggested Citation

  • Majeed, Muhammad Ansar & Xie, Shilei & Ullah, Irfan & Fu, Jianru & Wang, Chunlin, 2023. "Do powerful CEOs affect qualitative financial disclosure? Evidence from accounting comparability," Research in International Business and Finance, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:riibaf:v:66:y:2023:i:c:s0275531923001526
    DOI: 10.1016/j.ribaf.2023.102026
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    References listed on IDEAS

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    1. Luigi Zingales, 2000. "In Search of New Foundations," Journal of Finance, American Finance Association, vol. 55(4), pages 1623-1653, August.
    2. Chiu, Junmao & Chen, Chin-Ho & Cheng, Chung-Chieh & Hung, Shih-Chang, 2021. "Knowledge capital, CEO power, and firm value: Evidence from the IT industry," The North American Journal of Economics and Finance, Elsevier, vol. 55(C).
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    Cited by:

    1. Lakhal, Faten & Hamrouni, Amal & Jilani, Ibtissem & Mahjoub, Imen & Benkraiem, Ramzi, 2024. "The power of inclusion: Does leadership gender diversity promote corporate and green innovation?," Research in International Business and Finance, Elsevier, vol. 67(PA).

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    More about this item

    Keywords

    Comparability; CEO power; Media coverage; China;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General

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