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The Impact of Ancient Traditional Culture on Earnings Quality: The Moderating Role of Marketization Index in China's A-Share Market

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  • Cheng-Wen Lee
  • Min-Ying Cheng

Abstract

Our analysis, centered on A-share listed companies in China from 2007 to 2016, identified a negative correlation between China's marketization index and discretionary accruals. In regions characterized by strong traditional cultural influences, the presence of female directors and female top executives was found to be negatively associated with discretionary accruals. Further analysis revealed that China's marketization index could amplify this negative correlation, thereby enhancing corporate earnings quality. Conversely, the presence of female independent directors exhibited a positive correlation with discretionary accruals, a relationship that remained unaffected by the marketization index. In regions with weaker traditional cultural influence, the presence of female directors, female top executives, and female independent directors all demonstrated negative correlations with discretionary accruals. Notably, the marketization index influenced only the presence of female top executives in these regions, reinforcing the negative correlation and ultimately contributing to improved corporate earnings quality. Â JEL classification numbers: D24, E58, G24.

Suggested Citation

  • Cheng-Wen Lee & Min-Ying Cheng, 2024. "The Impact of Ancient Traditional Culture on Earnings Quality: The Moderating Role of Marketization Index in China's A-Share Market," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 14(6), pages 1-20.
    • Handle: RePEc:spt:admaec:v:14:y:2024:i:6:f:14_6_20
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    More about this item

    Keywords

    Chairperson or CEO; Ancient Traditional Culture; Marketization Index; Discretionary Accruals; Earning Quality.;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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