The Effect of Anti-subsidy Actions on Corporate Disclosure of Subsidy Information

54 Pages Posted: 14 Nov 2021

See all articles by Ningzhong Li

Ningzhong Li

University of Texas at Dallas

Wenjing Li

Jinan University, School of Management

Youchao Tan

Southwestern University of Finance and Economics (SWUFE)

Cheng (Colin) Zeng

Hong Kong Polytechnic University

Date Written: November 12, 2021

Abstract

This paper examines the effect of anti-subsidy investigation and penalty (through countervailing duties) on disclosure of government subsidy information by Chinese listed firms. We find that firms reduce disclosure of subsidy information when their exported products are facing anti-subsidy investigation or charged countervailing duties. The effect is stronger when the countervailing duties are higher, when the affected firms have a higher export revenue from the product under investigation or penalty, when the country taking the anti-subsidy action has a worse relationship with China, and when the affected firms export to more countries. The effect persists into three years after the action and spills over to peer firms that export the investigated products to other countries or export similar products.

Keywords: Government subsidies; Anti-subsidy; Countervailing duties; Corporate disclosure; International trade

JEL Classification: H25; M41; F10

Suggested Citation

Li, Ningzhong and Li, Wenjing and Tan, Youchao and Zeng, Cheng, The Effect of Anti-subsidy Actions on Corporate Disclosure of Subsidy Information (November 12, 2021). Available at SSRN: https://ssrn.com/abstract=3961963 or http://dx.doi.org/10.2139/ssrn.3961963

Ningzhong Li

University of Texas at Dallas ( email )

2601 North Floyd Road
Richardson, TX 75083
United States

Wenjing Li

Jinan University, School of Management ( email )

No. 601, West Huangpu Road
Guangzhou, Guangdong 510632
China

Youchao Tan

Southwestern University of Finance and Economics (SWUFE) ( email )

55 Guanghuacun St,
Chengdu, Sichuan 610074
China

Cheng Zeng (Contact Author)

Hong Kong Polytechnic University ( email )

11 Yuk Choi Rd
Hung Hom
Hong Kong

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