Consequences of financial reporting quality on corporate performance: Evidence at the international level

This paper examines the consequences of Financial Reporting Quality (FRQ) on Corporate Performance, using three proxies of FRQ: (i) earnings quality; (ii) conservatism; and (iii) accruals quality. Our purpose is to analyze the effect of a good FRQ on financial performance (FP) measured by the market...

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Autor principal:	Martínez-Ferrero,Jennifer
Lenguaje:	English
Publicado:	Universidad de Chile. Departamento de Economía 2014
Materias:	Financial Reporting Quality Financial Performance Accruals Quality Earnings Quality
Acceso en línea:	http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-52862014000100002
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spelling	oai:scielo:S0718-528620140001000022014-06-25Consequences of financial reporting quality on corporate performance: Evidence at the international levelMartínez-Ferrero,Jennifer Financial Reporting Quality Financial Performance Accruals Quality Earnings Quality This paper examines the consequences of Financial Reporting Quality (FRQ) on Corporate Performance, using three proxies of FRQ: (i) earnings quality; (ii) conservatism; and (iii) accruals quality. Our purpose is to analyze the effect of a good FRQ on financial performance (FP) measured by the market to book ratio. To this end, the proposed hypotheses are tested on an unbalanced sample of1, 960 international non-financial listed companies from 25 countries and the special administrative region of Hong-Kong for the period 2002-2010. The use of simultaneous equations for the panel data, via the GMM estimator proposed by Arellano and Bond (1991), highlights the positive effect of financial reporting quality (FRQ) on financial performance. This result is robust according to the different measurements of FRQ (earnings quality, accruals quality and accounting conservatism) and for an aggregated measure for the previous three proxies of FRQ. The empirical evidence shows that this relationship is moderated by the level of corruption perception in the country of origin of the company, the adoption of IFRS, the accounting system used in the country and the influence of the economic cycle.info:eu-repo/semantics/openAccessUniversidad de Chile. Departamento de EconomíaEstudios de economía v.41 n.1 20142014-06-01text/htmlhttp://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-52862014000100002en10.4067/S0718-52862014000100002
institution	Scielo Chile
collection	Scielo Chile
language	English
topic	Financial Reporting Quality Financial Performance Accruals Quality Earnings Quality
spellingShingle	Financial Reporting Quality Financial Performance Accruals Quality Earnings Quality Martínez-Ferrero,Jennifer Consequences of financial reporting quality on corporate performance: Evidence at the international level
description	This paper examines the consequences of Financial Reporting Quality (FRQ) on Corporate Performance, using three proxies of FRQ: (i) earnings quality; (ii) conservatism; and (iii) accruals quality. Our purpose is to analyze the effect of a good FRQ on financial performance (FP) measured by the market to book ratio. To this end, the proposed hypotheses are tested on an unbalanced sample of1, 960 international non-financial listed companies from 25 countries and the special administrative region of Hong-Kong for the period 2002-2010. The use of simultaneous equations for the panel data, via the GMM estimator proposed by Arellano and Bond (1991), highlights the positive effect of financial reporting quality (FRQ) on financial performance. This result is robust according to the different measurements of FRQ (earnings quality, accruals quality and accounting conservatism) and for an aggregated measure for the previous three proxies of FRQ. The empirical evidence shows that this relationship is moderated by the level of corruption perception in the country of origin of the company, the adoption of IFRS, the accounting system used in the country and the influence of the economic cycle.
author	Martínez-Ferrero,Jennifer
author_facet	Martínez-Ferrero,Jennifer
author_sort	Martínez-Ferrero,Jennifer
title	Consequences of financial reporting quality on corporate performance: Evidence at the international level
title_short	Consequences of financial reporting quality on corporate performance: Evidence at the international level
title_full	Consequences of financial reporting quality on corporate performance: Evidence at the international level
title_fullStr	Consequences of financial reporting quality on corporate performance: Evidence at the international level
title_full_unstemmed	Consequences of financial reporting quality on corporate performance: Evidence at the international level
title_sort	consequences of financial reporting quality on corporate performance: evidence at the international level
publisher	Universidad de Chile. Departamento de Economía
publishDate	2014
url	http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-52862014000100002
work_keys_str_mv	AT martinezferrerojennifer consequencesoffinancialreportingqualityoncorporateperformanceevidenceattheinternationallevel
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Consequences of financial reporting quality on corporate performance: Evidence at the international level

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