Mandatory Information Disclosure and Stock Price Crash Risk: Evidence from Private Firm-Visits in China

10 Pages Posted: 11 Dec 2019

See all articles by Yuqin Huang

Yuqin Huang

Central University of Finance and Economics (CUFE)

Timothy (Jun) Lu

Peking University HSBC Business School

Qiaoqiao Zhu

Australian National University (ANU) - College of Business and Economics; Financial Research Network (FIRN)

Date Written: November 23, 2019

Abstract

This paper studies the effect of mandatory information disclosure on stock price crash risk using data on listed firms’ private in-house meetings in the Chinese stock market. Utilizing the regulation implemented by the Shenzhen Stock Exchange in 2012, we use a difference-in-difference approach and find that the treated group exhibits significantly lower crash risk comparing to the control group listed on the Shanghai Stock Exchange, following the regulation. This finding suggests that improving transparency may reduce crash risk, and have implications to both academic and policymakers.

Keywords: mandatory information disclosure, stock price crash risk, difference-in-difference

JEL Classification: D82, G14, G18

Suggested Citation

Huang, Yuqin and Lu, Timothy (Jun) and Zhu, Qiaoqiao, Mandatory Information Disclosure and Stock Price Crash Risk: Evidence from Private Firm-Visits in China (November 23, 2019). Available at SSRN: https://ssrn.com/abstract=3492331 or http://dx.doi.org/10.2139/ssrn.3492331

Yuqin Huang

Central University of Finance and Economics (CUFE) ( email )

39 South College Road
Haidian District
Beijing, Beijing 100081
China

Timothy (Jun) Lu (Contact Author)

Peking University HSBC Business School ( email )

University Town
Nanshan District
Shenzhen, Guang Dong 518055
China

Qiaoqiao Zhu

Australian National University (ANU) - College of Business and Economics ( email )

Canberra, Australian Capital Territory 2601
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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