Effects of national culture on earnings quality of banks

• 成果类型: Article
• 署名作者: Kanagaretnam, Kiridaran; Lim, Chee Yeow; Lobo, Gerald J.
• 署名单位: McMaster University; Singapore Management University; University of Houston System; University of Houston; McMaster University
• 刊物名称: JOURNAL OF INTERNATIONAL BUSINESS STUDIES
• ISSN/ISSBN: 0047-2506
• DOI: 10.1057/jibs.2011.26
• 发表日期: 2011
• 页码: 853-874
• 关键词: NATIONAL CULTURE; earnings management; earnings quality; financial crisis loan loss provisions; just-meeting-or-beating earnings

摘要

We examine the relation between four dimensions of national culture and earnings quality of banks using a sample of banks from 39 countries. Our main analysis, which focuses on the pre-financial crisis period 1993-2006, indicates that banks in high individualism, high masculinity, and low uncertainty avoidance societies manage earnings to just-meet-or-beat the prior year's earnings. In tests of income smoothing through loan loss provisions, we find that banks in high individualism, high power distance, and low uncertainty avoidance societies report smoother earnings. Our exploratory analysis of the effects of national culture on accounting outcomes during the financial crisis period 2007-2008 indicates that cultures that encourage higher risk-taking experienced more bank troubles in the form of larger losses or larger loan loss provisions. Journal of International Business Studies (2011) 42, 853-874. doi:10.1057/jibs.2011.26