The relationship between analysts' forecasts and corporate fraud is a vital theoretical and practical question that needs to be clarified. Based on a strict distinction between negative performance gaps relative to analyst forecasts (negative forecast gaps hereinafter) and analyst coverage, this study investigates the influence of analyst forecasts on corporate fraud from a panoramic perspective. Using panel data on listed companies in China from 2008 to 2019, we find that short-term performance pressure caused by negative forecast gaps is significantly positively (...) correlated with firms’ possibility for fraudulent behavior. However, this positive correlation is weaker in state-owned enterprises than in their non-state-owned counterparts. Further, as a key external governance mechanism, analyst coverage enhances the negative moderator effect of state ownership on the positive relationship between negative forecast gaps and the likelihood of corporate fraud. (shrink)

We examine whether, relative to their global peers, the financial performance of firms from developing countries leads to increases in human rights abuses. We also study the institutional conditions that qualify this relationship. Based on a combination of behavioral and neo-institutional theories, we suggest there is a positive relationship between financial performance and human rights misbehavior as home country liabilities motivate firms to misbehave to achieve their primary goal of economic leadership. We also suggest that strong regulatory and normative pressures (...) attenuate the abovementioned positive relationship, as failure to comply with norms endangers such firms’ secondary goal of achieving international legitimacy. Our analysis, based on a sample of 245 large companies from eight developing countries studied over a 20-year period, supports our hypotheses. Our empirical results suggest that such companies misbehave when they endeavor to strike a balance between maintaining their global economic leadership and sustaining their social legitimacy. (shrink)

This study addresses a gap in the literature on corporate governance and corporate social responsibility by investigating whether and how board independence and institutional ownership moderate the relationship between digital transformation and corporate social performance. We find that digital transformation increases CSP using a panel dataset of Chinese publicly listed firms between 2014 and 2018. Moreover, we show that this positive impact is more pronounced when firms have higher proportions of independent directors on the board and institutional owners. These findings (...) contribute to a better understanding of CSR dynamics, supporting the formulation and implementation of efficient CSR strategies in the digital era. (shrink)