Reputational Sanctions in China's Securities Market
55 Pages Posted: 11 Jul 2007
Date Written: June 8, 2007
Abstract
Literature suggests two distinct paths to stock market development: an approach based on legal protections for investors, and an approach based on self-regulation of listed companies by stock exchanges. This paper traces China's attempts to pursue both approaches, while focusing on the role of the stock exchanges as regulators. Specifically, the paper examines a fascinating but unstudied aspect of Chinese securities regulation, namely, public criticism of listed companies by the Shanghai and Shenzhen exchanges. Based on both event study methodology and extensive interviews of market actors, we find that the criticisms have significant effects on listed companies and their executives. We evaluate the role of public criticisms in China's evolving scheme of securities regulation, contributing to several strands of research on the role of the media in corporate governance, the use of shaming sanctions in corporate governance, and the importance of informal mechanisms in supporting China's economic growth.
Keywords: China, stock market, securities regulation
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Merger Arbitrage Profitability in China
By Jason Tuan, Jason C. Hsu, ...
-
The New Takeover Regulation in China: Evolution and Enhancement
-
Assessing China's Top-Down Securities Markets
By William T. Allen and Han Shen
-
Law Without Order in Chinese Corporate Governance Institutions
-
A Comparative Study of Insider Trading Regulation Enforcement In the U.S. and China
By Han Shen
-
The Legal & Regulatory Framework of Securities Markets in the PRC
By Lay Hong Tan
-
A Review of Corporate Governance in China
By Lary Li, Tony Naughton (deceased), ...
-
Protecting Investors in China through Multiple Regulatory Mechanisms and Effective Enforcement
By Chenxia Shi
-
Old Stocks, New Owners: Two Cases of Ownership Change in China's Stock Market
By Stephen Paul Green and Jenna Ho