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Purchasing Power Returns – Political Uncertainty High According to the Joint Economic Forecast, Germany's gross domestic...
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Financial Stability
Financial Systems: The Anatomy of the Market Economy How the financial system is...
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ENTRANCES Energy Transitions from Coal and Carbon: Effects on Societies ...
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Tasks of the IWH Under the guiding theme "From Transition to European ...
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Banking Reform, Risk-Taking, and Accounting Quality: Evidence from Post-Soviet Transition States
Yiwei Fang, Wassim Dbouk, Iftekhar Hasan, Lingxiang Li
Journal of International Accounting Research,
No. 1,
2022
Abstract
The drastic banking reform within Central and Eastern Europe following the collapse of the Soviet Union provides an ideal quasi-experimental design to examine the causal effects of institutional development on accounting quality (AQ). We find that banking reform spurs significant improvement in predictive power of earnings and reductions in earnings smoothing, earnings-inflating discretionary provisions, and avoidance of reporting losses. These effects hold under alternative model specifications and after considering concurrent institutional developments. In contrast, corporate reform shows no such effects, refuting the alternative explanation that unobserved factors affect both reform speed in general and the quality of financial reporting. We further identify four specific reformative actions that are integral to the drastic banking reform process where prudential regulation contributes the most to the observed AQ improvement. It supports the conjecture that banking reform improves AQ by reducing banks' risk-taking behaviors and, as a result, their motive behind accounting manipulation.
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Centre for Evidence-based Policy Advice
Centre for Evidence-based Policy Advice (IWH-CEP) ...
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IWH FDI Micro Database
IWH FDI Micro Database The IWH FDI Micro Database (FDI = Foreign Direct...
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IWH Construction Survey
IWH Construction Survey From 1993 until the first quarter of 2017, the IWH...
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