The Impact of Boards'Informal Hierarchy on Enterprises'Strategies Choice of Earnings Smoothing:Regulatory Promotion or Control Inhibition
There is controversy over the inclusion of different attributes in earnings smoothing,and how to constrain earnings smoothing behavior from the perspective of corporate governance is particularly crucial.As the core of corporate governance,the internal operation of the board depends on whether it can play a positive governance role.In this context,it is of great significance to conduct research on earnings smoothing constraints from an informal hierarchical perspective.This article uses data from non-financial listed companies in A-share market from 2010 to 2021 to theoretically analyze and empirically test the impact of board informal hierarchy(BIH)on earnings smoothing with different attributes.Empirical research has found that a clearer BIH helps to suppress management's opportunistic earnings smoothing.The pathway of action indicates that the above-mentioned inhibitory effects can be achieved through a series of coordinated agency mechanisms,such as alleviating myopic tendencies,promoting active disclosure,and balancing the interests of multiple parties.The cross-sectional examination shows that a series of factors such as the formal hierarchy of the enterprise,the characteristics of the board,the information environment,and external supervision have heterogeneous effects on the aforementioned inhibitory effects.Moreover,the above tests also indicate that a clearer BIH has failed to regulate and promote effective informational earnings smoothing by its active governance role.This study provides a new approach to improving corporate governance through informal institutions in theory,and provides empirical evidence and policy implications for enterprises to comprehensively evaluate earnings smoothing attributes and enhance the incremental value of information disclosure.
boards'informal hierarchyearnings smoothingeffective information attributeopportunism attribute
万方数据
维普
