The Role of Private Disclosures in Markets with Weak Institutions: Evidence from Market Liberalization in China

• 成果类型: Article
• 署名作者: Yoon, Aaron S.
• 署名单位: Northwestern University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2018-0606
• 发表日期: 2021
• 页码: 433-455
• 关键词: bid-ask spreads; Information environment; CORPORATE DISCLOSURE; Domestic investors; REGULATION FD; management; price; US; INVESTMENT; analysts

摘要

I use the announcement of a market liberalization pilot program in China as a shock to firms' disclosure environment and examine how Chinese firms, foreign investors, and foreign brokers respond. Using a proprietary dataset, I find that affected firms respond to the announcement by significantly increasing the number of selective private meetings hosted by major foreign brokers, but do not use public disclosure channels. I find this increase in private disclosure to be stronger among firms that had strong public disclosure track records and are in need of capital. Firms that increased private disclosure experience improvements in speed of price discovery and liquidity. In addition, they also experience an increase in foreign holdings and raise capital abroad through foreign brokers after the pilot program's implementation. Overall, this paper takes a yet-to-mature economy, presents evidence on dynamic shaping of disclosure, and highlights private disclosure as an important positive channel of communication.