TY - GEN
T1 - For many firms, political relationships have a big influence on how they report financial results
AU - Kallias, Antonios
AU - Kallias, Konstantinos
AU - Liu, Jia
AU - Malikov, Kamran
AU - Zhang, Song
PY - 2025/12/1
Y1 - 2025/12/1
N2 - Firms have a choice about how they report their earnings – they can adjust the timing of what they report, or they can alter their actual business activities to change their annual bottom line. In new research, Antonios Kallias, Konstantinos Kallias, Jia Liu, Kamran Malikov and Song Zhang examine the relationship between how firms manage their earnings and their political relationships. They find that firms with more transactional political relationships focus on low-cost short-term earnings manipulation. By contrast, firms that have high-value, long-term, political relationships are more willing to change their actual business activities to maintain those relationships, potentially protecting their political allies from reputational risk.
AB - Firms have a choice about how they report their earnings – they can adjust the timing of what they report, or they can alter their actual business activities to change their annual bottom line. In new research, Antonios Kallias, Konstantinos Kallias, Jia Liu, Kamran Malikov and Song Zhang examine the relationship between how firms manage their earnings and their political relationships. They find that firms with more transactional political relationships focus on low-cost short-term earnings manipulation. By contrast, firms that have high-value, long-term, political relationships are more willing to change their actual business activities to maintain those relationships, potentially protecting their political allies from reputational risk.
M3 - Other contribution
T3 - LSE United States Centre
PB - London School of Economics and Political Science
ER -