The imprint of history: family firm origin and accounting information comparability in China

Purpose Accounting information, serving as an important signal in capital markets, increasingly highlights the quality of financial reporting. This paper examines the differences in accounting information comparability across different family firm origins. Design/methodology/approach Using data on Chinese manufacturing family firms from 2009 to 2023, we employ a model with year and industry fixed effects to examine the relationship between family firm origin and accounting information comparability, as well as the underlying mechanisms. The final sample consists of 4,075 firm-year observations from 881 firms, with financial data obtained from the China Stock Market & Accounting Research database. Findings The main effects show that restructured family firms tend to have lower accounting comparability. The moderating effects show that the agency problem exacerbates this divergence in accounting comparability, whereas the number of generations involved in management mitigates it. The mechanism analysis shows that restructured family firms exhibit lower internal control quality and greater managerial myopia, both of which are associated with lower accounting comparability. Originality/value First, drawing on imprinting theory, this study finds that restructured family firms exhibit lower comparability of accounting information. This expands the scope of comparability research by extending it to factors related to historical origins. Second, this study expands upon the concepts of imprint dynamics and imprint decay in family firm origin research, thereby incorporating perspectives on the persistence and decay of imprints within imprinting theory. Finally, this paper adds a new dimension to research on the economic consequences of privatization for Chinese firms. Privatization not only affects operational efficiency but also shapes the information environment of financial reporting over the long term.