The Effects of a U.S. Approach to Enforcement: Evidence from China

作者：Tinghua Duan, Kai Li, Rafael Rogo, Ray Zhang · 发表于：Journal of Financial and Quantitative Analysis · 年份：2023 · DOI：10.1017/s0022109023000352 · 被引用次数：28 · 研究领域：Auditing, Earnings Management, Governance、Corporate Finance and Governance、Political Influence and Corporate Strategies

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.