Panda Games: Corporate Disclosure in the Eclipse of Search

• 成果类型: Article
• 署名作者: Wang, Kemin; Yu, Xiaoyun; Zhang, Bohui
• 署名单位: Fudan University; Shanghai Jiao Tong University; The Chinese University of Hong Kong, Shenzhen; The Chinese University of Hong Kong, Shenzhen; The Chinese University of Hong Kong, Shenzhen
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2022.4521
• 发表日期: 2023
• 页码: 3263-3284
• 关键词: technology and governance; Strategic disclosure; Textual analysis; Google

摘要

We show that firms strategically alter their disclosures when investors' access to information via search engines is interrupted. We conduct a textual analysis and exploit an exogenous event-Google's 2010 surprising withdrawal from mainland China, which significantly hampered domestic investors' ability to search for foreign information but did not affect their cost to access domestic information. Following Google's exit, Chinese firms' announcements on foreign transactions become more bullish relative to domestic transactions. Optimism in disclosure is especially rosy if the press releases are conveying negative news or are issued by poorly governed firms. This effect is mitigated in the presence of foreign investors or analysts affiliated with foreign brokers who are not subject to foreign information censorship by the government. The increase in search cost also appears to leave domestic news media and financial analysts more vulnerable to the influence of corporate disclosure. These optimistic announcements allow insiders to harvest higher returns from selling their shares and are associated with a higher likelihood of corporate misconduct.