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CSRC oral communication and corporate disclosure

Author

Listed:
  • Hou, Chenxue
  • Wang, Qijian

Abstract

Oral communication has increasingly been used as a policy tool by the China Securities Regulatory Commission (CSRC) to regulate the Chinese financial market. However, less is known about whether and how this newly developed policy tool affects corporate decisions. Using machine-learning techniques, this paper develops a measure to evaluate the CSRC's oral emphasis on financial disclosure based on transcripts of its press conferences and official speeches. We find that when the CSRC places more emphasis on disclosure, both the quantity and quality of corporate disclosure are improved. Further evidence suggests that listed firms with external financing plans respond more to CSRC oral communication. Moreover, under political pressure, state-owned enterprises (SOEs) comply more with CSRC oral communication in terms of disclosure quantity but not disclosure quality.

Suggested Citation

  • Hou, Chenxue & Wang, Qijian, 2023. "CSRC oral communication and corporate disclosure," Journal of Corporate Finance, Elsevier, vol. 79(C).
    • Handle: RePEc:eee:corfin:v:79:y:2023:i:c:s0929119922001948
    DOI: 10.1016/j.jcorpfin.2022.102351
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    More about this item

    Keywords

    Oral communication; Regulatory commission; Corporate disclosure; Machine learning;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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