Siirry sisältöön
  • Add to calendar
    Bank of Finland, Rauhankatu 19 B, Helsinki

Di Gong: (University of International Business and Economics) - Branching and dress-up of financial reports: Evidence from the dynamics of loan loss provisions and earnings management in Chinese banks

Co-authors: Tianshi Li (University of International Business and Economics, Beijing) and Jigao Zhu (University of International Business and Economics, Beijing) 


Do banks dress up regulatory variables when applying for inter-province branching? We study this issue by exploiting the unique setting in China, where the application of city commercial banks for inter-province expansion needs approval from local regulators. As loan loss provisions (LLPs) is carefully considered in the evaluation, banks have incentives to dress up LLPs around expanding to another province. We find evidence that banks raise LLPs before applying for branching and then lower LLPs for earnings management after branching.


BOFIT seminars are open to all researchers interested in the subjects covered. Those wishing to attend a seminar are kindly asked to register in advance, by email bofit(at) or tel. +358 9 183 2268.

Seminars take place, as a rule, on Tuesdays, starting at 10.30 a.m.  Visitors are escorted to the seminar room from the Rauhankatu 19 B (Library) entrance.