The Effect Of Cross-Listing On The Quality Of Accounting Information Of A+H Shares

Nowadays, the globalization trend is obvious. Due to their own development needs, Enterprises move towards internationalization actively. Cross-listing has become the main feature of the international finance in the past 20 years. Because of the influence and restriction of law, economic factor, policy and culture, A+H cross-listing has become a main choice for Chinese enterprises. Chinese Hong Kong, a world-recognized international financial center after New York and London, plays an important role in international finance. Up to May 2015, the number of A+H shares cross-listed companies have reached 87.Accounting information, a fundamental stone for the listed companies run well in the capital market, plays an increasingly important role in economic activities, at the same time, it is also the basis for investors to make the right decisions. Therefore, study on the quality of cross-listed company’s accounting information is particularly important. Whether the new accounting standards began to be implemented in 2007 has an impact on it, this is a question worth exploring.This paper selected A+H shares cross-listed companies and only A-shares listed companies from 1998 to 2014 as samples. Based on the samples, the quality of accounting information of those was empirically researched by the one-to-many sample matching method. This paper used Jones model to calculate the discretionary accruals as the token variable of earnings quality, and measures the quality of accounting information with the measurement of the earnings information quality. The closer to 0 the measure value of the earnings information quality was, the better the sample’s accounting information quality was. In addition, the paper used the two other models, which was used in study on the persistence of earnings quality and ERC, to carry on the robustness test. Meanwhile, it studied on whether the difference in the quality of accounting information between the A+H shares cross-listed companies and the A-shares companies significantly changed before-and-after the promulgation of the new accounting standards.Research results:by describing the statistics, found that the discretionary accruals of the A+H shares closer to 0 than A-shares listed companies, indicated that the earnings quality of A+H shares cross-listed companies is higher. By means comparison and variance analysis, proved that A+H shares cross-listed company’s discretionary accrual and only A-shares listed company’s discretionary accrual were significantly different. At the same time, the two other models about the persistence of earnings quality and the ERC also confirmed the conclusion. A+H shares cross-listed company’s accounting information quality was better than only A- shares listed companies. And the annual interval significance test showed, after the implementation of the new accounting standards in 2007, the difference in the quality of accounting information between the A+H shares cross-listed companies and the A-shares companies significantly changed, the disparity of the quality was enlarged.