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This paper focuses on how the employment of robot influences accounting comparability in Chinese manufacturing and provides evidence of a positive link. Promoting operating stability and reducing earnings management are two underlying mechanisms. Furthermore, the positive link is more significant in firms within high‐tech industries or owing higher skilled labour, with firms being covered by analysts or the legal environment being enhanced, and the positive link becomes more significant. Overall, our study brings substantial evidence that supports the spillover effect of robots on financial reporting. [ABSTRACT FROM AUTHOR]

In China, the deviation of enterprises from the real economy to the financial sector has raised concerns. Using a sample of listed companies held by central state‐owned enterprises from 2009 to 2018, we investigate the influence of government supervision on this deviation. We find that government supervision effectively reduces investments in financial assets by central state‐owned enterprises. The impact is more significant in enterprises with internal control deficiencies, especially in those related to finance. Further study finds that the effect of government supervision conducted for the first time, second time, and third time shows a decreasing trend. [ABSTRACT FROM AUTHOR]

Through using 17,995 firm‐year observations of all the Chinese A‐share listed firms from 2008 to 2016 as a sample, we document that firms with vertical interlock have a lower likelihood of committing corporate fraud. We further test the underlying mechanisms, and we find that the effect of vertical interlock on the occurrence of corporate fraud is more pronounced when firms operate in a region with poor legal protection; with the legal environment being enhanced in China, the effect of vertical interlock has become less significant; and the effect of vertical interlock is also more pronounced when firms exhibit poor information environment at the firm level. Our results in this paper imply that the role of large shareholders and legal protection are substitutes in an emerging economy, and even with rapid economic and legal development in China, large shareholders keep playing a positive role in controlling fraudulent behaviours in Chinese listed firms. [ABSTRACT FROM AUTHOR]

As an important part of the national political system, government audits play a significant role in supervising and restricting enterprises. Since 2010, the National Audit Office of China has repeatedly disclosed the problems regarding enterprises' M&A to prevent the loss of state-owned assets. This study takes listed companies controlled by the central enterprises of A-shares from 2008 to 2018 as a sample to investigate the impact of government audit supervision on M&A. We find that government audit supervision reduces the number and scale of M&As. Further research shows that government audits can reduce enterprises' M&A premiums and affect payment methods. Finally, government audits significantly improve the short- and long-term performance of M&As. These findings show that Chinese government audits positively affect corporate governance, curbing M&As that damage enterprise interests. This study provides micro-level evidence of the governance effect of government audits on the scientific decision-making of enterprises. [ABSTRACT FROM AUTHOR]

Research Question/Issue: This study investigates how traditional Confucian culture affects executive compensation from three dimensions: CEO compensation level, CEO pay gap (the pay gap between CEO and other management members), and the gender pay gap. Research Findings/Insights: We find that firms' exposure to stronger Confucianism is associated with less CEO compensation, a smaller CEO pay gap, and a larger gender pay gap in China. These findings are consistent with the core values of moderatism, collectivism, and patriarchalism rooted in the Confucian culture. Our findings are robust to different firms' exposure to Confucian culture measures. Endogeneity concerns are further addressed with a subsample of firms that experienced headquarters relocation. Cross‐sectional analyses show that the influence of traditional Confucian culture is more pronounced for firms facing less industry competition, owned by the state, or with a higher concentration of power. Additional analyses show that the Confucian culture also reduces the CEO's pay‐for‐performance sensitivity, weakens pay incentives, and leads to lower firm risk‐taking; however, it also mitigates firm agency problems by reducing firm earnings management and managerial perk consumption. The combination of these positive and negative effects reduces the firm's overall value. Theoretical/Academic Implications: This study expands our understanding of the role of informal institutions in corporate behavior. Corporate governance is embedded in the market's formal institutions, which, in turn, are embedded in local informal institutions. Academically, our study suggests further corporate governance research on informal institutions, especially in emerging markets where institutional development is not yet complete and informal institutions play a particularly important role. Practitioner/Policy Implications: This study could help practitioners better understand the business culture and compensation contract design in Confucian nations. It also suggests that policymakers consider the effect of informal institutions when designing formal institutions. [ABSTRACT FROM AUTHOR]

The paper discusses the effects of the digital economy on highquality urban development and its mechanism. Theoretically, the digital economy can empower high-quality development by boosting entrepreneurial vitality. Empirically, the paper measures the overall level of the digital economy and high-quality development of the 222 Chinese cities at and above the prefecture level during 2011–2016, depicts the entrepreneurial vitality of the cities with the microscopic data of the business registration information and makes quantitative analysis on this basis. The result shows: Digital economy has remarkably improved high-quality development and this conclusion still exists after the robustness test selecting historical data as the instrumental variables and the Broadband China pilot policy as the quasi experiment. The analysis of the mechanism of action indicates that encouraging public entrepreneurship is an important mechanism of the digital economy to release the dividend of highquality development. Finally, thanks to the threshold model and the spatial model, it is found that the positive effect of the digital economy has the characteristics of nonlinear increment and spatial spillover of the “marginal effects.” The research of the paper stimulates the reasons for high-quality development and the understanding of the effects, mechanisms and regional differences of high-quality development empowered by the digital economy. [ABSTRACT FROM AUTHOR]

This paper documents empirical support for a key micro‐level channel – banking structure change induced by entry of small banks – through which financial sector deregulation affects corporate innovation. Using China's banking deregulation on city commercial banks in 2006, we find robust evidence that banking structural change induced by the entry of small banks stimulates local industrial patent output. Furthermore, we find that the stimulating effects of small bank entry on local industrial patent output are more pronounced when the local banking system is previously dominated by large state‐owned banks and when the small banks have entered a city with more small and medium‐sized enterprises (SMEs). Our study suggests that banking structure change induced by small banks crucially affects the real economy. [ABSTRACT FROM AUTHOR]

Using the sample of listed firms in China from 2004 to 2014, this paper investigates the impact of pyramidal ownership structure on firms' audit fees. The results show that (1) generally, the greater the number of pyramidal layers, the more audit fees the firm pays; (2) compared with non-state-owned firms, this relationship is weaker in state-owned firms. Additional tests show that the number of pyramidal layers has a stronger impact on audit fees in firms whose voting rights and cash flow rights are separated. However, CEO duality and management ownership do not affect this relationship. Moreover, in state-owned firms, the positive relationship between the number of pyramidal layers and audit fees only exists in those firms whose ultimate controllers' administrative level is lower. This paper expands the studies on the consequences of pyramidal ownership structure and introduces shareholding structure into the research on determinants of audit fees. [ABSTRACT FROM AUTHOR]

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