Prague Economic Papers 2016, 25(4):459-475 | DOI: 10.18267/j.pep.570

Logo Colour, Earnings Management and Firm Value

Tao Chen
Lee Shau Kee School of Business and Administration, Open University of Hong Kong, Homantin, Kowloon, Hong Kong

I document a new channel that can be used by managers who can take advantage of investors preference for logo colours to influence their perception of the financial reports and thus indirectly affect firm value. Evidence suggests that firms having warm colours as a major logo colour, fewer colours used in the logo, and recognizable elements in the logo are associated with lower earnings management and higher firm value. My findings remain stable across different robustness checks.

Keywords: logo, firm value, earnings management, colour
JEL classification: G02, G32, M41

Published: January 1, 2016  Show citation

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Chen, T. (2016). Logo Colour, Earnings Management and Firm Value. Prague Economic Papers, 25(4), 459-475. doi: 10.18267/j.pep.570
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