Investor protection and audit fees: evidence from the E-interaction platform in China

DOI码：10.1080/00014788.2021.1938961

发表刊物：Accounting and Business Research

关键字：Corporate governance; Investor protection; Audit fees; Tunnelling

摘要：This paper investigates the impact of investor protection on audit fees using a quasi-natural experiment provided by the introduction of the E-interaction platform in China. E-interaction provided investors with a platform to communicate directly with listed companies and participate in discussions of corporate matters, thereby enhancing the rights and interests of small and medium-sized investors, i.e. investor protection. Employing a difference-in-differences design, I find that, firms listed on the Shanghai Stock Exchange experienced a large reduction in audit fees after the adoption of E-interaction. The results are robust to changes in event windows and alternative research designs. Further analyses demonstrate that the reduction in audit fees was greater for firms with a higher level of expropriation of minority shareholders, i.e. tunnelling. I also find that controlling shareholders’ tunneling behaviours decreased after the introduction of E-interaction. Taken together, my results suggest that increased investor protection reduces audit fees by mitigating agency conflicts between the controlling shareholder and minority shareholders.

论文类型：期刊论文

学科门类：管理学

卷号：52

期号：7

页面范围：815–837

是否译文：否

发表时间：2022-12-01