"An empirical study of voluntary transfer pricing disclosures in China" by Wai Yee, Agnes LO and Man Kong, Raymond WONG
 

An empirical study of voluntary transfer pricing disclosures in China

Document Type

Journal article

Source Publication

Journal of Accounting and Public Policy

Publication Date

11-1-2011

Volume

30

Issue

6

First Page

607

Last Page

628

Publisher

Elsevier Inc.

Abstract

This paper empirically investigates the factors that affect the management's voluntary disclosures of the transfer pricing details of related-party transactions. Using Chinese data from 2004 and 2005, we hypothesize and find that firms that make voluntary disclosures of the pricing methods of related-party transactions are negatively associated with (i) a higher level of earnings management (as captured by abnormal related-party transactions) and (ii) its underlying incentives (as captured by the management's performance-linked bonuses and the firm's incentives to achieve earnings targets); further, they are positively associated with (i) a higher percentage of independent directors and (ii) a higher percentage of government ownership. Overall, our findings suggest that earnings management and its incentives, board composition, and ownership structure significantly influence the voluntary disclosure decisions of managers.

DOI

10.1016/j.jaccpubpol.2011.08.005

Print ISSN

02784254

E-ISSN

18732070

Publisher Statement

Copyright © 2011 Elsevier Inc

Access to external full text or publisher's version may require subscription.

Full-text Version

Publisher’s Version

Language

English

Recommended Citation

Lo, A. W. Y., & Wong, R. M. K. (2011). An empirical study of voluntary transfer pricing disclosures in China. Journal of Accounting & Public Policy, 30(6), 607-628. doi: 10.1016/j.jaccpubpol.2011.08.005

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Plum Print visual indicator of research metrics
  • Citations
    • Citation Indexes: 33
  • Usage
    • Abstract Views: 18
  • Captures
    • Readers: 139
see details