Anti-corruption campaigns and corporate information release in China

Anti-corruption campaigns and corporate information release in China Chinese anti-corruption campaigns executed by CCDI (Central Commission for Discipline Inspection) put politicians under high scrutiny. We employ CCDI's inspections as the event and use counterfactual analysis to show that corporations in inspected provinces significantly suppress negative information release evidenced by stock prices following Chen et al. (2001). The variation of political maneuvers to suppress negative information release is consistent with local politician's influences and incentives in affiliated firms, e.g., SOEs or politically connected non-SOEs. SOEs continue to suppress negative information release while non-SOEs experience mean-reversion after inspections. Good governance and auditor's quality partially mitigate manager's incentives to suppress bad news. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Corporate Finance Elsevier

Anti-corruption campaigns and corporate information release in China

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Publisher
Elsevier
Copyright
Copyright © 2018 Elsevier B.V.
ISSN
0929-1199
D.O.I.
10.1016/j.jcorpfin.2018.01.008
Publisher site
See Article on Publisher Site

Abstract

Chinese anti-corruption campaigns executed by CCDI (Central Commission for Discipline Inspection) put politicians under high scrutiny. We employ CCDI's inspections as the event and use counterfactual analysis to show that corporations in inspected provinces significantly suppress negative information release evidenced by stock prices following Chen et al. (2001). The variation of political maneuvers to suppress negative information release is consistent with local politician's influences and incentives in affiliated firms, e.g., SOEs or politically connected non-SOEs. SOEs continue to suppress negative information release while non-SOEs experience mean-reversion after inspections. Good governance and auditor's quality partially mitigate manager's incentives to suppress bad news.

Journal

Journal of Corporate FinanceElsevier

Published: Apr 1, 2018

References

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