skip to main content
Language:
Search Limited to: Search Limited to: Resource type Show Results with: Show Results with: Search type Index

Who cooks the books in China, and does it pay? Evidence from private, high-technology firms

Strategic management journal, 2016-12, Vol.37 (13), p.2658-2676 [Peer Reviewed Journal]

Copyright © 2016 John Wiley & Sons Ltd. ;Copyright © 2015 John Wiley & Sons, Ltd. ;Copyright © 2016 John Wiley & Sons, Ltd. ;ISSN: 0143-2095 ;EISSN: 1097-0266 ;DOI: 10.1002/smj.2466 ;CODEN: SMAJD8

Full text available

Citations Cited by
  • Title:
    Who cooks the books in China, and does it pay? Evidence from private, high-technology firms
  • Author: Stuart, Toby ; Wang, Yanbo
  • Subjects: China ; Companies ; Cooks ; emerging market economies ; Emerging markets ; financial fraud ; Financial reporting ; Financial statements ; Fraud ; Government agencies ; High tech industries ; Innovations ; political connection ; Technology ; Venture capital
  • Is Part Of: Strategic management journal, 2016-12, Vol.37 (13), p.2658-2676
  • Description: Research summary: We document the extent of fraudulent reporting among 467 private Chinese technology companies. Comparing the financial statements concurrently submitted to two different state agencies, we demonstrate a systematic gap in reported profit figures in the two sets of books. We find: (1) more than half the sampled companies report incentive-compatible, materially discrepant profit numbers to the two agencies; (2) politically connected companies are approximately 18 percent more likely to commit fraud and those with venture capital backing are 19 percent more likely to do so; and (3) it pays to cheat. We estimate that companies who "cook" their books have considerably higher odds of receiving an innovation grant. Especially given its prevalence, we conclude that fraud can be a source of performance differential for emerging market companies. Managerial summary: We document that more than half of a sample of 467 private, Chinese technology companies engage in fraudulent financial reporting. By comparing the financial statements companies concurrently submitted to two different state agencies, we demonstrate a systematic gap in reported profit figures in the two sets of books. Relative to the companies without these attributes, we find that politically connected companies are approximately 18 percent more likely to commit fraud and those with venture capital backing are 19 percent more likely to do so. Furthermore, we show that it pays to cheat. We estimate that companies who "cook" their books have considerably higher odds of receiving a government-sponsored innovation grant. Therefore, fraud can be a source of performance differential for emerging market companies.
  • Publisher: Chichester, UK: John Wiley & Sons, Ltd
  • Language: English
  • Identifier: ISSN: 0143-2095
    EISSN: 1097-0266
    DOI: 10.1002/smj.2466
    CODEN: SMAJD8
  • Source: Alma/SFX Local Collection
Back to results list
INSPIRE LIBRARY - TON DUC THANG UNIVERSITY (84-028) 37 755 057 Feedback
19 Nguyen Huu Tho St. Dist.7, HCM thuvien@tdtu.edu.vn

Copyright © 2017 INSPIRE LIBRARY - TON DUC THANG UNIVERSITY

Searching Remote Databases, Please Wait