Local Political Corruption and Financial Reporting Conservatism

We are grateful for the valuable comments and suggestions from Sarah L. C. Zechman (editor), two anonymous referees, Bruce Grundy, André Gygax, Jun Huang, Zhuo Huang, Elisabeth Kempf, Nan Li, Linxiang Ma, Jeffrey Ng, Chenkai Ni, Raghu Rau, Gary Tian, Rencheng Wang, Yuxi Wang, John Wei, Yizhou Xiao, Yuecheng Yu, Tengfei Zhang, Bo Zhou, Leon Zolotoy, the six anonymous procurators in China, the seminar participants at the University of Cambridge, The Chinese University of Hong Kong, Colorado State University, Deakin University, The Hong Kong Polytechnic University, Jilin University of Finance and Economics, The University of Melbourne, Shanghai University of Finance and Economics, Sun Yat-sen University, Tsinghua University, and the participants at the 2018 China Finance Review International Conference and the 2018 Taiwan Finance Association Conference. We also thank Jian Huang for his excellent research assistance. We acknowledge financial support from the Ministry of Education (Singapore) (Tier 1 Award RG103/22 and Tier 3 Award MOET32022-0006), the National Natural Science Foundation of China (No. 71972186, 72132010, and 72072067), the 111 Project (B20094), and the General Research Fund of the Research Grants Council of Hong Kong (No. 14500221). All authors contributed equally to this work and share first authorship. The author list is in alphabetical order.

All errors are our own.

Xin Chang, Nanyang Technological University, Nanyang Business School, Division of Banking and Finance, Singapore; Shanmin Li, Sun Yat-sen University, School of Business and Center for Accounting, Finance, and Institutions, Department of Finance and Investment, Guangzhou, Guangdong, China; Chun Liu and Liang Sun, Sun Yat-sen University, International School of Business and Finance, Department of Business Administration, Zhuhai, Guangdong, China; Wenrui Zhang, Colorado State University, College of Business, Department of Finance and Real Estate, Fort Collins, CO, USA.

Supplemental material is available online, as linked in the text.

Editor’s note: Accepted by Sarah L. C. Zechman, under the Senior Editorship of W. Robert Knechel.