Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

The impact of air pollution on financial reporting quality: evidence from China

The impact of air pollution on financial reporting quality: evidence from China In this study, we investigate whether the unpleasant mood of managers caused by air pollution leads to poorer decision‐making quality. Using a sample of 9,282 firm‐year observations from 2014 to 2017 in China, we show that (i) the mood of managers becomes more negative as air quality decreases; and (ii) there is a negative relation between air pollution and financial reporting quality. Furthermore, this association is stronger for firms with (i) weaker corporate governance; and (ii) top management teams with a lower average age, fewer females and a lower average educational level. Our results hold through various robustness tests. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting & Finance Wiley

The impact of air pollution on financial reporting quality: evidence from China

Accounting & Finance , Volume Early View – Dec 20, 2021

Loading next page...
 
/lp/wiley/the-impact-of-air-pollution-on-financial-reporting-quality-evidence-EzYCXreGt7
Publisher
Wiley
Copyright
Accounting and Finance © 2021 Accounting and Finance Association of Australia and New Zealand
ISSN
0810-5391
eISSN
1467-629X
DOI
10.1111/acfi.12898
Publisher site
See Article on Publisher Site

Abstract

In this study, we investigate whether the unpleasant mood of managers caused by air pollution leads to poorer decision‐making quality. Using a sample of 9,282 firm‐year observations from 2014 to 2017 in China, we show that (i) the mood of managers becomes more negative as air quality decreases; and (ii) there is a negative relation between air pollution and financial reporting quality. Furthermore, this association is stronger for firms with (i) weaker corporate governance; and (ii) top management teams with a lower average age, fewer females and a lower average educational level. Our results hold through various robustness tests.

Journal

Accounting & FinanceWiley

Published: Dec 20, 2021

Keywords: Air pollution; Financial reporting quality; Mood; RDD

References