The power of a name: Surname culture and corporate earnings management

Read full text
Authors: Shixian Ling, Sujun Liu, Zhangxin Frank Liu
Cited by: 0
References: 58

Abstract

We examine how surname culture influences earnings management in Chinese A-share firms from 2007 to 2023. Firms whose boards exhibit stronger surname culture, measured by the presence or proportion of directors sharing the chair’s surname, engage in significantly less accrual-based earnings management. The effect remains robust to alternative proxies, estimation methods, and identification strategies. Mechanism analyses show that surname culture mitigates financing constraints and enhances firms’ ESG performance, thereby reducing incentives for opportunistic reporting. The constraining effect is more pronounced when the chair’s surname is rarer, consistent with tighter social cohesion and reputational discipline in smaller surname groups. Moreover, when surname ties newly emerge within a board, earnings management declines significantly. Our findings reveal that surname culture functions as an informal governance mechanism that complements formal institutions and constrains managerial opportunism in China’s transitional economy.

Fields of Study & Subjects

Linguistics Language Diversity and Identity Names Identity and Discrimination Research

Publication details

Journal / source
Journal of International Financial Markets Institutions and Money
Publisher
Elsevier BV
Volume
113
Pages
102395–102395
Publication date
6 September 2026
Language
EN