The influence of clan culture on the accounting information quality: evidence from privately listed firms in China

Based on a sample of privately listed firms in China from 2007 to 2020, this study examines the impact of clan culture on accounting information quality. The results indicate that regions with stronger clan culture significantly improve the quality of accounting information. This study also investigates two potential channels: the trust channel and the moral standards channel, revealing that clan culture fosters trust and ethical norms, effectively reducing earnings management and enhancing accounting information quality. Additionally, the findings show that firms with stronger clan cohesion and greater prevalence of clan culture experience more substantial improvements in accounting information quality, while external cultural shocks diminish this effect. These findings enhance our understanding of how informal institutions influence the financial performance of publicly listed firms and emphasize the importance of preserving native culture in a globalized world.