Journal of Financial and Quantitative Analysis · 2023 · 27 citations · 37 references
BusinessAccountancyAccountingCorporate DisclosureCorporate ReportingRegulatory ComplianceAsymmetric InformationCorporate TransparencyDisclosureDisclosure ComplianceDisclosure TheoryInformation AsymmetryEnforced DisclosureEnforcement Of Disclosure RulesInformation Asymmetry EffectsInformation Asymmetry ReductionInformation Disclosure RegulationMandatory Disclosure RulesMarket Reaction To DisclosureStock Price Reaction Analysis
Abstract 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.
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On Information and Sufficiency
S. Kullback, R. A. Leibler · The Annals of Mathematical Statistics · 1951 · 20K citations · Full text
Financial Dependence and Growth
Raghuram G. Rajan, Luigi Zingales · American Economic Review · 1996 · 6.8K citations