Effect of place of incorporation, Chinese culture, and business practices on corporate fraud : evidence from Hong Kong listed companies

Chui Ling, Josephine PANG, Ming Sum, Simon LO

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

1 Scopus Citations

Abstract

Mainland Chinese companies make up more than 50% of the Hong Kong securities market in terms of number of listings and market capitalization. Our empirical results indicate that Chinese companies have a higher incidence of corporate fraud and greater fraud severity than other listed counterparts, even after controlling for state versus private ownership, internal corporate governance, financial standing, firm characteristics, and time factors. Further investigation reveals that incorporation in China and Chinese culture and business practices are two distinct and major driving factors in corporate fraud. Conventional explanatory variables for corporate fraud other than board tenure, firm size, listing year, and year of fraud detection do not have explanatory power in the Hong Kong context.
Original languageEnglish
Pages (from-to)221-245
Number of pages25
JournalAsia-Pacific Journal of Financial Studies
Volume46
Issue number2
DOIs
Publication statusPublished - 1 Apr 2017

Fingerprint

Listed companies
Business practices
Chinese culture
Fraud
Hong Kong
Factors
Tenure
Private ownership
Severity
Market capitalization
Fraud detection
Securities market
Empirical results
Corporate governance
Firm size
China
Firm characteristics

Keywords

  • Chinese cross-border listings
  • Corporate culture and practices
  • Corporate fraud
  • Hong Kong
  • Legal system
  • Ownership structure

Cite this

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title = "Effect of place of incorporation, Chinese culture, and business practices on corporate fraud : evidence from Hong Kong listed companies",
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Effect of place of incorporation, Chinese culture, and business practices on corporate fraud : evidence from Hong Kong listed companies. / PANG, Chui Ling, Josephine; LO, Ming Sum, Simon.

In: Asia-Pacific Journal of Financial Studies, Vol. 46, No. 2, 01.04.2017, p. 221-245.

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

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