Market Competitive Strategy and Audit Firm Choice:‎Moderating Roles of TMT Diversity and Ownership ‎Structure in Chinese Manufacturing Firms

  • Authors

    • Wei Zheng Faculty of Economics & Management, Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor, Malaysia
    • Mohd Mohid Rahmat Faculty of Economics & Management, Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor, Malaysia
    • Noor Hasni Juhdi Faculty of Economics & Management, Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor, Malaysia
    • Mohd Fahmi Ghazali Faculty of Economics & Management, Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor, Malaysia
    • Meng Na Graduate School of Business, Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor, Malaysia
    https://doi.org/10.14419/g24zsw46

    Received date: November 13, 2025

    Accepted date: November 23, 2025

    Published date: November 29, 2025

  • Big 4 Auditors; Family Firms; Gender Diversity; International Experience; Jiangsu; Strategic Orientation; TMT Characteristics; Upper Echelons ‎Theory

  • 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.

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    Zheng, W., Rahmat , M. M. ., Juhdi, N. H., Ghazali, M. F., & Na, M. (2025). Market Competitive Strategy and Audit Firm Choice:‎Moderating Roles of TMT Diversity and Ownership ‎Structure in Chinese Manufacturing Firms. International Journal of Accounting and Economics Studies, 12(7), 806-817. https://doi.org/10.14419/g24zsw46