Regional accounting conservatism and macroeconomic growth: evidence from China

ABSTRACT

The quality of accounting information determines whether such information can serve as an effective basis for rational macroeconomic regulation and investment decisions. Studying accounting conservatism is crucial because it plays a pivotal role in shaping the macroeconomic landscape. This study examines the impact of accounting conservatism on the speed and quality of macroeconomic growth in emerging markets. Our findings indicate that regional accounting conservatism can hinder the speed of macroeconomic growth but enhance its overall quality. This effect is channelled primarily through aggregate corporate profits, total factor productivity level, and dispersion. Further analysis reveals that this relationship is more pronounced in regions characterised by high financial marketisation, weak government intervention, and well-developed intermediary markets. This study significantly enriches our understanding of the macroeconomic consequences of accounting conservatism in emerging markets and provides valuable insights into future macroeconomic trends at both the quantitative and qualitative levels.

KEYWORDS:

• Accounting conservatism
• GDP growth
• economy growth quality
• total factor productivity
• aggregate corporate profits

JEL CLASSIFICATION:

• E27
• M21
• M41

Disclosure statement

No potential conflict of interest was reported by the author(s).

Correction Statement

This article has been corrected with minor changes. These changes do not impact the academic content of the article.

Additional information

Funding

We disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: National Natural Science Foundation of China (Project No. 72102139; No. 72002069), Shanghai Science and Technology Committee (Project No. 22692105300), and Shanghai Municipal Education Commission and Shanghai Education Development Foundation (Project No.20CG67).