Governance Tensions in MNCs’ Financial Reporting Quality

Given the scarcity of the literature on corporate governance arbitrage theory, our unique sample of MNCs operating subsidiaries in OFCs can definitely add to the understanding of the mobility of bad governance. [...] To understand the varying nature of MNCs with OFC subsidiaries and affiliates, we collect information on their subsidiaries or affiliates and weigh the offshore attitude indexes by the number of subsidiaries or affiliates (divided by the total number of subsidiaries or affiliates of a MNC). [...] A series of F-tests on the coefficients of the sum of Cross_listing and OFCindex*Cross_listing shows that we significantly reject the hypothesis that the sum of the coefficients equals zero (e.g. [...] A series of F-tests on the coefficients of the sum of GOVindex (GoodGov) and OFCindex*GOVindex (OFCindex*GoodGov) shows that we significantly reject the hypothesis that the sum of the coefficients equals zero in most regressions. [...] The covariate comparison of the cross-listing and matched 11 For the advantages of using the PSM, refer to Larcker and Rusticus (2010).