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ERIC Number: EJ1471423
Record Type: Journal
Publication Date: 2025-Aug
Pages: 26
Abstractor: As Provided
ISBN: N/A
ISSN: ISSN-0193-841X
EISSN: EISSN-1552-3926
Available Date: 0000-00-00
Internal Control Quality and Boardroom Backscratching
Lei Huang1; Chunmei Tang1; Manman Li2
Evaluation Review, v49 n4 p599-624 2025
In modern firms, conflicts may arise between the chief executive officer and board of directors due to the separation of ownership and operations. Such conflicts may weaken listed companies' performance in the short term or affect their development in the long term. Using data on Shanghai and Shenzhen A-share listed companies from 2013 to 2022, this study empirically examines the impact of internal control quality on boardroom backscratching. We find that internal control quality significantly mitigates boardroom backscratching by reducing agency costs and increasing analyst attention. This effect is more significant in firms where the management holds less power and the product market is highly competitive. Furthermore, the mitigating effects of internal control quality on boardroom backscratching effectively reduce the risk of the company's share price collapsing. Overall, this study enriches the literature on boardroom backscratching and internal control quality, and provides valuable references for stakeholders, including listed companies, to improve firm governance efficiency and, thus, maintain the stability of capital markets.
SAGE Publications. 2455 Teller Road, Thousand Oaks, CA 91320. Tel: 800-818-7243; Tel: 805-499-9774; Fax: 800-583-2665; e-mail: journals@sagepub.com; Web site: https://sagepub.com
Publication Type: Journal Articles; Reports - Research
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Grant or Contract Numbers: N/A
Author Affiliations: 1School of Management, Xihua University, Chengdu, China; 2School of Economics and Management, Southwest Jiaotong University, Chengdu, China