Publication Type
Journal Article
Version
publishedVersion
Publication Date
2-2026
Abstract
Can social norms give rise to distorted information in China? We observe that China’s leading social norm related to alcohol consumption and social drinking enhance earnings management. An analysis of toxic alcohol scandals supports a causal interpretation. Further evidence suggests that the influence of alcohol may come from the negative externality that it creates, which is propagated by corporate leaders and cannot be attenuated by market-oriented institutions. Our results reveal a social norm externality that may have important normative implications.
Keywords
Alcohol, Disclosure, Earnings Management, Information Distortion, Social Norms
Discipline
Asian Studies | Corporate Finance | Finance and Financial Management
Research Areas
Finance
Publication
Journal of Financial and Quantitative Analysis
Volume
61
Issue
1
First Page
370
Last Page
408
ISSN
0022-1090
Identifier
10.1017/S0022109025101634
Publisher
Cambridge University Press
Citation
LI, Zhe; MASSA, Massimo; XU, Nianhang; and ZHANG, Hong.
A social norm perspective on distorted information in China. (2026). Journal of Financial and Quantitative Analysis. 61, (1), 370-408.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/7750
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.
Additional URL
https://doi.org/10.1017/S0022109025101634
Included in
Asian Studies Commons, Corporate Finance Commons, Finance and Financial Management Commons