Newspaper Censorship in China: Evidence from Tunneling Scandals

63 Pages Posted: 13 Jan 2017 Last revised: 4 May 2020

See all articles by Ole-Kristian Hope

Ole-Kristian Hope

University of Toronto - Rotman School of Management

Yi Li

Hunan University

Qiliang Liu

Wuhan University - School of Economics and Management

Han Wu

HEC Paris

Multiple version iconThere are 2 versions of this paper

Date Written: May 3, 2020

Abstract

Media dissemination has an important function in facilitating price discovery. Political pressure that restricts media dissemination can hinder this function and affect investors’ perceptions. We investigate the magnitude and economic consequences of China’s newspaper censorship, which blocks further dissemination of firm-disclosed information, using a setting of “tunneling” scandals. We show significant evidence of censorship of tunneling-related negative news at both the national and the local levels. We further find that censorship leads to delays in the dissemination of tunneling news and that the news that survives censorship potentially targets less serious issues, which hinders the media’s dissemination function and delays incorporation of information into prices.

Keywords: Censorship, Media, Newspapers, China, Social and Economic Incentives, Local Protection, Information Environment, Market Reactions

JEL Classification: D83, F23, G30, G34, J50, M10, M16, M41, M48, N25, N45, O53

Suggested Citation

Hope, Ole-Kristian and Li, Yi and Liu, Qiliang and Wu, Han, Newspaper Censorship in China: Evidence from Tunneling Scandals (May 3, 2020). 2017 Canadian Academic Accounting Association (CAAA) Annual Conference, 28th Annual Conference on Financial Economics and Accounting, Available at SSRN: https://ssrn.com/abstract=2897758 or http://dx.doi.org/10.2139/ssrn.2897758

Ole-Kristian Hope (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

HOME PAGE: http://www.rotman.utoronto.ca/FacultyAndResearch/Faculty/FacultyBios/Hope.aspx

Yi Li

Hunan University ( email )

2 Lushan South Rd
Changsha, CA Hunan 410082
China

Qiliang Liu

Wuhan University - School of Economics and Management ( email )

Wu Han, Hu-Bai 430072
China

Han Wu

HEC Paris ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
France

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