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The Dark Side of Chinese Time-Honored Brands: Evidence from Earnings Opacity

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  • Xingqiang Du
  • Hexin Tao
  • Yingjie Du

Abstract

This study examines whether Chinese Time-Honored Brands affect earnings opacity, and then investigates the moderating effect of regulatory intensity. Using a sample of 18,519 firm-year observations from the Chinese stock market over 2007–2020, our findings reveal that earnings opacity is significantly higher for firms with Chinese Time-Honored Brands than for their counterparts, suggesting that firms with Chinese Time-Honored Brands aggressively manage earnings and increase earnings opacity to cover up misconducts or engage in impression management. Moreover, regulatory intensity attenuates the impact of Chinese Time-Honored Brands on earnings opacity. Furthermore, our findings are robust to sensitivity tests, and further our conclusions are still valid after using the propensity score matching approach to control for the endogeneity issue. Lastly, big4 auditors weaken the effect of Chinese Time-Honored Brands on earnings opacity.

Suggested Citation

  • Xingqiang Du & Hexin Tao & Yingjie Du, 2025. "The Dark Side of Chinese Time-Honored Brands: Evidence from Earnings Opacity," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 61(14), pages 4399-4417, November.
    • Handle: RePEc:mes:emfitr:v:61:y:2025:i:14:p:4399-4417
    DOI: 10.1080/1540496X.2025.2513349
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