The Effects of a U.S. Approach to Enforcement: Evidence from China - Archive ouverte HAL
Article Dans Une Revue Journal of Financial and Quantitative Analysis Année : 2023

The Effects of a U.S. Approach to Enforcement: Evidence from China

Résumé

We examine the effects of implementing a U.S. approach to the enforcement of mandatory disclosure in China. Using a hand-collected sample of comment letters (CLs) issued by the Shanghai Stock Exchange over the period of 2013 to 2018, we show that stock price reactions to CL receipts and replies are negative and significant. Using textual analysis to match issues raised by regulators to targeted firms’ changes in disclosure, we show that these firms do address CL issues point by point, but do not experience significant improvements in their information environments. Our article highlights the importance of incentives rather than regulation/enforcement in reducing information asymmetry.

Dates et versions

hal-04543591 , version 1 (12-04-2024)

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Tinghua Duan, Kai Li, Rafael Rogo, Ray Zhang. The Effects of a U.S. Approach to Enforcement: Evidence from China. Journal of Financial and Quantitative Analysis, 2023, 59 (1), pp.121-156. ⟨10.1017/S0022109023000352⟩. ⟨hal-04543591⟩
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