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Does Regulatory Attention Towards Trading Manipulation Curb Stock Price Volatility?

Author

Listed:
  • Yuxin Wang
  • Yilin Luo
  • Chenkai Ni
  • Jianqiao Hong

Abstract

We examine whether regulatory attention towards trading manipulation curbs stock price volatility. Exploiting a unique setting in China in which the regulators announced investigations into trading manipulations of selected newly listed firms, we find a significant postinvestigation decline in the price volatility of all newly listed firms. The volatility reduction is stronger for stocks that are more subject to manipulations, that is, stocks with higher uncertainty, lower analyst attention and lower media attention. Furthermore, newly listed firms also experience a reduction in online discussions and trading volume of individual investors who are plausible counterparties of manipulators.

Suggested Citation

  • Yuxin Wang & Yilin Luo & Chenkai Ni & Jianqiao Hong, 2025. "Does Regulatory Attention Towards Trading Manipulation Curb Stock Price Volatility?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 65(3), pages 2626-2648, September.
    • Handle: RePEc:bla:acctfi:v:65:y:2025:i:3:p:2626-2648
    DOI: 10.1111/acfi.70009
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    References listed on IDEAS

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