Comply-or-explain regulation and investor protection☆

• 成果类型: Article
• 署名作者: Bourveau, Thomas; Gao, Xingchao; Li, Rongchen; Zhou, Frank S.
• 署名单位: Columbia University; University of Toronto; University of Pennsylvania
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2025.101765
• 发表日期: 2025
• 关键词: earnings management; corporate governance; cash; EXPROPRIATION; INFORMATION; RIGHTS; CONSEQUENCES; institutions; disclosure; MARKETS

摘要

We investigate a 2012 comply-or-explain regulation implemented by China's Shanghai Stock Exchange. The regulation requires eligible firms to pay 30% of their current-year profits as cash dividends or explain the reasons why they do not meet this requirement through a public conference call. Using firms listed on the Shenzhen Stock Exchange as a control group, our difference-in-differences estimates suggest that firms subject to the regulation decreased tunneling, irrespective of whether they complied by paying or disclosing. Further analyses suggest that the reduction in tunneling is partially attributed to enhanced regulatory monitoring over explaining firms and the constraint on excess cash of paying firms. These findings offer novel policy insights into how a flexible comply-or-explain form of regulation can mitigate agency costs between controlling and minority shareholders in a weak institutional environment.