The Impact of Corporate Geographic Decentralization on the Quality of Accounting Disclosure
DOI:
https://doi.org/10.54097/5v3qmx85Keywords:
Geographic decentralization, Quality of accounting information, Internal control, Traffic accessibility, Moderating effect.Abstract
The Quality of accounting information is of paramount importance in facilitating investment decision-making processes for investors and there is an observed trend towards geographic decentralization within large publicly listed corporations. Drawing on a trans-regional imitation perspective, the paper examined the impact of geographical decentralization on the quality of accounting information. We apply a novel approach to measure the geographical distance, two-stage least squares estimation and PSM were conducted to test the hypotheses. The findings show that geographic decentralization negatively relates to the quality of accounting disclosure. Moreover, this association is more pronounced for corporations with low-quality corporate government as well as in provinces where the traffic accessibility is poor. These results not only provide companies better strategic planning about regional expansion but also help investors to acknowledge potential risks about the accounting information quality of decentralized companies.
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