Market Competitive Strategy and Audit Firm Choice:Moderating Roles of TMT Diversity and Ownership Structure in Chinese Manufacturing Firms
Year: 2025
Type: article
Abstract: This study examines how top management team (TMT) characteristics and strategic orientation influence the selection of Big 4 audit firms among listed manufacturing companies in Jiangsu, China. Drawing on Upper Echelons Theory, Strategic Fit Theory, and Agency Theory, the research investigates whether firms with offensive strategic orientations are more likely to engage Big 4 auditors, and how this relationship is moderated by TMT gender diversity and overseas experience. Using a panel dataset of 282 A-share manufacturing firms spanning 2012–2022 (yielding 1,905 firm-year observations), we apply logistic regression with interaction effects. Results show that offensive strategies significantly increase the likelihood of Big 4 auditor selection. Furthermore, the presence of female executives and internationally experienced managers strengthens this relationship, particularly within non-family firms. Interaction models demonstrate improved predictive accuracy (McFadden’s R² = 0.183; classification accuracy = 72.3%). These findings provide theoretical contributions by linking behavioral governance with strategic signaling and offer practical insights for firms seeking legitimacy through audit firm choice in competitive environments.
DOI: 10.14419/g24zsw46
Authors: Wei Zheng, Mohd Mohid Rahmat, Noor Hasni Juhdi, Mohd Fahmi Ghazali, Meng Na
Institution: National University of Malaysia
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4416827407
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