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Conference Paper: Performance Consequences of the 'Fit' Between Management Accounting and Control Systems and the Environment: Evidence from Publicly-Listed Chinese Firms

TitlePerformance Consequences of the 'Fit' Between Management Accounting and Control Systems and the Environment: Evidence from Publicly-Listed Chinese Firms
Authors
Issue Date2008
Citation
AAA 2008 Management Accounting Section (MAS) Meeting, 2008 How to Cite?
AbstractWe examine the performance consequences of the fit between environmental factors surrounding publicly-listed firms in China's emerging economy, and the firms' use of, and emphasis on management accounting and control systems (MCS): formal planning and budget controls, participative budgeting and performance evaluation, strategic performance measures and rewards, and socialization practices. We use archival data and survey data collected from senior- and middle-level managers in 158 publicly-listed Chinese firms. We find robust and consistent evidence that more extensive use of MCS is associated with higher concurrent and lagged accounting (return on assets) and market (market return) performance, and lower market beta. More importantly, we find robust and consistent evidence for the alignment hypothesis that less - but not more - extensive use of MCS than predicted by the firms' market competition and growth opportunities adversely affects performance, both subjective-based (assessed by senior-level managers) and accounting- and market-based. Our results suggest that a misfit between the firms' environmental characteristics and their MCS practices hurts the firms' performance. We discuss the implications of our findings, and provide some directions for future research.
Persistent Identifierhttp://hdl.handle.net/10722/112342
SSRN

 

DC FieldValueLanguage
dc.contributor.authorO'Connor, NGen_HK
dc.contributor.authorVera-Munoz, SC-
dc.contributor.authorChan, F-
dc.date.accessioned2010-09-26T03:27:57Z-
dc.date.available2010-09-26T03:27:57Z-
dc.date.issued2008en_HK
dc.identifier.citationAAA 2008 Management Accounting Section (MAS) Meeting, 2008-
dc.identifier.urihttp://hdl.handle.net/10722/112342-
dc.description.abstractWe examine the performance consequences of the fit between environmental factors surrounding publicly-listed firms in China's emerging economy, and the firms' use of, and emphasis on management accounting and control systems (MCS): formal planning and budget controls, participative budgeting and performance evaluation, strategic performance measures and rewards, and socialization practices. We use archival data and survey data collected from senior- and middle-level managers in 158 publicly-listed Chinese firms. We find robust and consistent evidence that more extensive use of MCS is associated with higher concurrent and lagged accounting (return on assets) and market (market return) performance, and lower market beta. More importantly, we find robust and consistent evidence for the alignment hypothesis that less - but not more - extensive use of MCS than predicted by the firms' market competition and growth opportunities adversely affects performance, both subjective-based (assessed by senior-level managers) and accounting- and market-based. Our results suggest that a misfit between the firms' environmental characteristics and their MCS practices hurts the firms' performance. We discuss the implications of our findings, and provide some directions for future research.-
dc.languageengen_HK
dc.relation.ispartofAAA 2008 Management Accounting Section (MAS) Meetingen_HK
dc.titlePerformance Consequences of the 'Fit' Between Management Accounting and Control Systems and the Environment: Evidence from Publicly-Listed Chinese Firmsen_HK
dc.typeConference_Paperen_HK
dc.identifier.emailO'Connor, NG: oconnor@business.hku.hken_HK
dc.identifier.authorityO'Connor, NG=rp01089en_HK
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.2139/ssrn.1003963-
dc.identifier.hkuros145434en_HK
dc.identifier.ssrn1003963-

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