Perks and the informativeness of stock prices in the Chinese market

Ferdinand A. Gul, Tsz Wan Cheng, T. Y. Leung

Research output: Journal article publicationJournal articleAcademic researchpeer-review

39 Citations (Scopus)

Abstract

While the literature shows that perks can affect firm values positively or negatively, we argue that firms with higher perks are more likely to be associated with a lower quality of financial reporting, which, in turn, can affect the informativeness of stock prices. Based on hand-collected data on perks from Chinese listed firms, we find that firms with lower perks are associated with higher informativeness of stock prices (or lower R-square). Moreover, the positive association between perks and R-square is shown to be weaker for firms with higher financial reporting quality through audit and earnings quality measures.
Original languageEnglish
Pages (from-to)1410-1429
Number of pages20
JournalJournal of Corporate Finance
Volume17
Issue number5
DOIs
Publication statusPublished - 1 Dec 2011

Keywords

  • Auditor quality
  • Earnings quality
  • Perks
  • R-square

ASJC Scopus subject areas

  • Business and International Management
  • Finance
  • Economics and Econometrics
  • Strategy and Management

Cite this