Title

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

Document Type

Journal article

Source Publication

Asia-Pacific Journal of Financial Studies

Publication Date

4-1-2017

Volume

46

Issue

2

First Page

221

Last Page

245

Publisher

Wiley-Blackwell

Keywords

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

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.

DOI

10.1111/ajfs.12168

Print ISSN

20419945

E-ISSN

20416156

Publisher Statement

Copyright © 2017 Korean Securities Association. Access to external full text or publisher's version may require subscription.

Full-text Version

Publisher’s Version

Recommended Citation

Pang, J. C.-L., & Lo, S. M.-S. (2017). Effect of place of incorporation, Chinese culture, and business practices on corporate fraud: Evidence from Hong Kong listed companies. Asia-Pacific Journal of Financial Studies, 46(2), 221-245. doi: 10.1111/ajfs.12168

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