International expansion and home-country resource acquisition: A signaling perspective of emerging-market firms’ internationalization

Du, Jialin; Zhao, Eric Yanfei

doi:10.1057/s41267-023-00624-z

Cited by 10 publications

(11 citation statements)

References 61 publications

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“…Hence, we adopt the method of measuring international expansion from the perspective of overseas subsidiaries. This approach is consistent with previous studies (Du & Zhao, 2023). This paper uses the number of overseas subsidiaries surviving in the current year to measure the degree of international expansion.…”

Section: Independent Variablesupporting

confidence: 72%

“…Therefore, for reasons of client acquisition and reduction of audit costs, accounting firms may purposefully reduce audit fees and tacitly agree to some unreasonable requests from auditees, such as purchasing audit opinions (Lin & Wang, 2022). At the same time, in the context of emerging economies, global firms are considered to be "star firms" with higher bargaining power than average firms (Du & Zhao, 2023). In the halo of "internationalization", auditors are also willing to reduce their audit fees in exchange for long-term cooperation.…”

Section: International Expansion and Audit Opinion Shoppingmentioning

confidence: 99%

“…For example, Tashman et al (2019) note that the degree of internationalization affects their tendency to engage in corporate social responsibility decoupling. Du and Zhao (2023) state that by taking advantage of information asymmetries, multinational enterprises can signal to the outside world that they are "high-quality firms" and thus gain access to more credit resources. Then, does international expansion lead to the emergence of audit opinion shopping?…”

Section: Introductionmentioning

confidence: 99%

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Retracted: International expansion and audit opinion shopping: A signaling perspective

Ding

2024

J Corp Accounting Finance

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Opinion shopping is an essential indication of audit collusion. Hence, it is crucial to explore the driving factors of audit uopinion shopping to better control and address this issue. Drawing upon signaling theory, this paper explores the relationship between international expansion and audit opinion shopping and the moderating roles of internal control quality and auditors’ quality. We find that the higher the level of international expansion of an enterprise, the greater the likelihood of audit opinion shopping. Furthermore, we also find that high internal control quality and high auditor quality can weaken the positive relationship between international expansion and audit opinion shopping. Besides, heterogeneity analysis shows that the impact of international expansion on audit opinion shopping is more pronounced in non‐SOEs and firms which stay in the growth and maturity stage. This paper contributes to the antecedent research of audit opinion shopping and exposes the possible “dark side” of international expansion. Finally, this study may provide practical implications to help the authorities better regulate internationalized enterprises as well as contribute to the healthy development of the auditing market.

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Section: Independent Variablesupporting

confidence: 72%

Section: International Expansion and Audit Opinion Shoppingmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Retracted: International expansion and audit opinion shopping: A signaling perspective

Ding

2024

J Corp Accounting Finance

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“…Recently, some studies suggest that the effect of political connections may spillover to EEFs' interactions with other stakeholders via a signaling mechanism (Du and Zhao, 2023). Explicitly, political connections can be a signal that influences partners' judgment about firms' goodwill and competence.…”

Section: Political Connections and Firms' Trade Creditmentioning

confidence: 99%

“…In emerging economies such as China, firms tend to foster and resort to political connections to obtain favorable treatment in commercial disputes (Ang and Jia, 2014;Firth et al, 2011;Xu, 2020). However, firms' political connections can be also a signal used by partners to assess firms' trustworthiness (Den Hond et al, 2014;Du and Zhao, 2023). Trustworthiness can be considered to encompass two primary dimensions: goodwill trust and competence trust (Jiang et al, 2013;Lui and Ngo, 2004;Newell et al, 2019).…”

Section: Introductionmentioning

confidence: 99%

Political connections and firms’ trade credit in emerging economies

Zou,

Xie,

Mei

2023

JBIM

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Purpose Trade credit is an important business-to-business marketing tool for building firms’ competitive advantage. Many studies explore the determinants of trade credits from a trust-based view, but the role of political connections is largely overlooked, despite their potential influence in assessing firms’ trustworthiness in the context of emerging economies. This study aims to fill this gap by examining how political connections affect the capacity of emerging economy firms (EEFs) to grant and receive trade credit. Design/methodology/approach This study tests a conceptual model using secondary data collected from 1,149 Chinese privately owned listed manufacturing firms between 2008 and 2016. Findings This study finds that political connections reduce EEFs’ accounts receivable and payable; their philanthropic activities alleviate this negative effect for accounts payable, while patent applications reduce it for accounts receivable. These findings suggest the effect of political connections can spillover to EEFs’ relationship with their up- and down-stream partners. Practical implications This study has implications EEF managers, particularly in pointing to the detrimental effect of political connections on relationships with buyers and suppliers, and highlights the need to adopt suitable approaches to offset this effect. Originality/value This study sheds new light on the negative effect of political connections on EEFs’ capacity to grant and receive trade credit in their exchanges with up-stream and down-stream partners. It enriches the trust-based view of trade credit by revealing the significant influence of EEFs’ political connections, while also advancing a contingency view by testing the moderating role of corporate philanthropic activities and patent applications.

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The Role of Inward FDI and Family Firm Heterogeneity on Foreign Location Choice: Evidence from India

Mondal,

Lahiri

2024

Manag Int Rev

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International expansion and home-country resource acquisition: A signaling perspective of emerging-market firms’ internationalization

Cited by 10 publications

References 61 publications

Retracted: International expansion and audit opinion shopping: A signaling perspective

Retracted: International expansion and audit opinion shopping: A signaling perspective

Political connections and firms’ trade credit in emerging economies

The Role of Inward FDI and Family Firm Heterogeneity on Foreign Location Choice: Evidence from India

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