Political Risk, Political Polarization, and Earnings Management
研究发现企业面临的政治风险越高，越倾向于进行真实盈余管理，而政治极化会加剧这一关系；市场对高风险下进行真实盈余管理的企业相对宽容。
ABSTRACT We examine how exposure to firm‐level political risk (PRISK) affects corporate earnings management (EM). We present robust evidence that heightened PRISK leads to an increase in real earnings management (REM); however, we do not find consistent evidence supporting an increase in accrual earnings management (AEM). Our results remain robust when employing difference‐in‐differences (DiD), two‐stage least squares (2SLS), propensity score matching (PSM), and additional methods designed to address endogeneity concerns. Additionally, we document that firm‐level political polarization exposure (PPE) intensifies the PRISK‐REM relationship. More interestingly, the financial market is relatively forgiving to firms that engage in REM activities in the face of both high PRISK and high PPE. Our findings provide novel insights into how PRISK shapes the financial reporting quality, and the critical role PPE plays in this relationship.