@article{199affde457448bd9bb8b1911ab1d5a2,
title = "Accounting quality and alliance contract provisions",
abstract = "We show that the number of governance provisions imposed on a firm by a strategic alliance partner decreases with the firm's accounting quality. This effect is weaker when the firm has greater bargaining power and stronger when the alliance project is riskier. Moreover, the net benefit to an alliance partner of imposing an additional governance provision on its counterparty apparently increases when the counterparty accounting quality is low, resulting in an enhancement of the partner's market value and a reduction in its bankruptcy risk. Furthermore, alliance partners adopt fewer provisions based on their counterparties' accounting numbers when the counterparties' accounting quality is poor.",
author = "Rui Ge and Yuan Ji and Henock Louis",
note = "Funding Information: This paper benefits from comments by Bill Baber, Agnes Cheng, Gregory J. Clinch (editor), Anna Costello, Junfang Deng, Angela K. Gore, Brian J. Henderson, Gang Hu, Chris Jones, Farah Kabir, Sok-Hyon Kang, Bin Ke, Xi Li (FARS discussant), Jeff Ng, Jim Ohlson, Grace Pownall, Tianshu Qu, Oded Rozenbaum, Kathrine Schipper, Dan Simunic, Yanfeng Xue, Holly Yang, two anonymous referees, and workshop participants at The George Washington University, Georgetown University, National University of Singapore, The Hong Kong Polytechnic University, and the 2016 Financial Accounting and Reporting Section Midyear Meeting. Rui Ge acknowledges research funding from the National Natural Science Foundation of China (project numbers: 71672165, 71790603). Publisher Copyright: {\textcopyright} 2021 American Accounting Association. All rights reserved.",
year = "2021",
month = jul,
doi = "10.2308/TAR-2017-0623",
language = "English (US)",
volume = "96",
pages = "261",
journal = "Accounting Review",
issn = "0001-4826",
publisher = "American Accounting Association",
number = "4",
}