IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v74y2025ics1544612324017100.html
   My bibliography  Save this article

Bet-on agreements and stock price informativeness

Author

Listed:
  • Zhao, Zhenzhen
  • Li, Yuanqi
  • Wu, JianHan

Abstract

Betting agreements, with their growing popularity in enterprises, may profoundly affect a firm's information environment. Using a sample of publicly listed firms in China from 2011 to 2021, this study explores the effect of betting agreements and stock price informativeness. We find strong evidence that betting agreements increase stock price informativeness. Two potential economic channels, namely, media coverage and corporate governance, underpin this relationship. This study enriches the literature on betting agreements and stock price informativeness and offers important practical implications.

Suggested Citation

  • Zhao, Zhenzhen & Li, Yuanqi & Wu, JianHan, 2025. "Bet-on agreements and stock price informativeness," Finance Research Letters, Elsevier, vol. 74(C).
    • Handle: RePEc:eee:finlet:v:74:y:2025:i:c:s1544612324017100
    DOI: 10.1016/j.frl.2024.106681
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612324017100
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2024.106681?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Tang, Liang & Wan, Xiangyu, 2022. "Economic policy uncertainty and stock price informativeness," Pacific-Basin Finance Journal, Elsevier, vol. 75(C).
    2. Xintao Li & Qian Li, 2022. "Does corporate social responsibility affect the achievement of performance commitment in valuation adjustment mechanism agreement? Evidence from Chinese listed company," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(2), pages 533-543, March.
    3. Shiyun Zeng & Wenfei Li & Qingquan Tang, 2022. "Accounting conservatism and the fulfilment of the target’s performance commitment in valuation adjustment mechanism contracts," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 29(6), pages 1497-1517, November.
    4. Barka, Zeineb & Benkraiem, Ramzi & Hamza, Taher & Lakhal, Faten & Vigne, Samuel, 2023. "Institutional investor horizon and stock price synchronicity: Do product market competition and analyst coverage matter?," International Review of Financial Analysis, Elsevier, vol. 89(C).
    5. Le, Anh-Tuan & Doan, Anh-Tuan & Lin, Kun-Li, 2024. "CEO overconfidence and the informativeness of bank stock prices," International Review of Financial Analysis, Elsevier, vol. 94(C).
    6. Ballas, Apostolos A. & Chalevas, Constantinos & Tzovas, Christos, 2012. "Market reaction to valuation adjustments for financial instruments: Evidence from Greece," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 21(1), pages 52-61.
    7. Jody Grewal & Clarissa Hauptmann & George Serafeim, 2021. "Material Sustainability Information and Stock Price Informativeness," Journal of Business Ethics, Springer, vol. 171(3), pages 513-544, July.
    8. Qian, Binsheng & Tan, Yusen, 2024. "Firm-specific investor sentiment and stock price informativeness," Finance Research Letters, Elsevier, vol. 66(C).
    9. Nuno Fernandes & Miguel A. Ferreira, 2009. "Insider Trading Laws and Stock Price Informativeness," The Review of Financial Studies, Society for Financial Studies, vol. 22(5), pages 1845-1887, May.
    10. Zhao, Jingmei & Gan, Qinyu, 2024. "The more the merrier? The impact of information overload on stock price synchronicity: Evidence from China," Finance Research Letters, Elsevier, vol. 62(PA).
    11. Zeineb Barka & Ramzi Benkraiem & Taher Hamza & Faten Lakhal & Samuel Vigne, 2023. "Institutional investor horizon and stock price synchronicity: Do product market competition and analyst coverage matter?," Post-Print hal-04193270, HAL.
    12. Incheol Kim & Christos Pantzalis & Bin Wang, 2018. "Shareholder coordination and stock price informativeness," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 45(5-6), pages 686-713, May.
    13. XiaoGang Bi, 2021. "Make a promise: the valuation adjustment mechanism in Chinese private target acquisitions," The European Journal of Finance, Taylor & Francis Journals, vol. 27(16), pages 1645-1668, November.
    14. Yong Xue & Xinyi Yun, 2022. "The optimal performance target of valuation adjustment mechanism agreement with real options perspective," PLOS ONE, Public Library of Science, vol. 17(11), pages 1-19, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ayaz, Muhammad & Anwer, Zaheer & Hassan, M. Kabir & Xiaoyang, Xu, 2025. "Inhabiting influence of digital finance on stock price synchronicity," Global Finance Journal, Elsevier, vol. 64(C).
    2. Dai, Shuo & Sun, Yonghe, 2025. "Corporate carbon emissions disclosure and stock price informativeness," Finance Research Letters, Elsevier, vol. 73(C).
    3. Wang, Kai & Zhao, Jingjing & Zhou, Jun, 2024. "Online sales and stock price synchronicity: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 95(PA).
    4. Kanamura, Takashi, 2025. "A quantitative model of sustainability risk in finance," Journal of Commodity Markets, Elsevier, vol. 37(C).
    5. Hu, Kexin & Li, Xingyi & Li, Zhongfei, 2024. "Effect of ESG rating disagreement on stock price informativeness: Empirical evidence from China's capital market," International Review of Financial Analysis, Elsevier, vol. 96(PB).
    6. Guo, Jinwen & Duan, Jiangjiao, 2024. "The impact of MD&A digital transformation information disclosure on stock price synchronicity in China," The North American Journal of Economics and Finance, Elsevier, vol. 74(C).
    7. Barth, Mary E. & Cahan, Steven F. & Chen, Li & Venter, Elmar R. & Wang, Ruili, 2025. "Textual dimensions of sustainability information, stock price informativeness, and proprietary costs: Evidence from integrated reports," The British Accounting Review, Elsevier, vol. 57(3).
    8. Tao Chen & Robert K. Larson & Han Mo, 2024. "Investor Herding and Price Informativeness in Global Markets: Evidence from Earnings Announcements," Journal of Behavioral Finance, Taylor & Francis Journals, vol. 25(1), pages 92-110, January.
    9. Huang, Wenhui & Shen, Zhihan, 2024. "Corporate green innovation and stock price non-synchronicity: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 52-64.
    10. Ning, Wei & Zhao, Jiahua & Jiang, Fuwei, 2024. "ETFs and tail dependence: Evidence from Chinese stock market," Journal of International Money and Finance, Elsevier, vol. 149(C).
    11. Che, Jiayi & Chen, Jinsong, 2024. "Empirical study on marketing investment and business innovation—A case analysis based on small and medium enterprises," Finance Research Letters, Elsevier, vol. 69(PB).
    12. Ren, He & Ye, Linlin & Zheng, Shi, 2024. "Share repurchase and capital market pricing efficiency," Finance Research Letters, Elsevier, vol. 60(C).
    13. Li, Weiping & Li, Tingyu & Jiang, Dequan & Zhang, Xuezhi, 2024. "Bridging the information gap: How digitalization shapes stock price informativeness," Journal of Financial Stability, Elsevier, vol. 71(C).
    14. Sun, Zeyu & Kong, Ningning & Wu, Lei & Bao, Yu, 2024. "Does contingent payment in M&As induce acquirers’ earnings management? Evidence from performance commitment," Research in International Business and Finance, Elsevier, vol. 69(C).
    15. Yunsen Chen & Jianqiao Huang & Xiao Li & Qingbo Yuan, 2022. "Does stock market liberalization improve stock price efficiency? Evidence from China," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 49(7-8), pages 1175-1210, July.
    16. Wu, Yanghui, 2023. "Banking competition and stock price crash risk," Finance Research Letters, Elsevier, vol. 58(PB).
    17. Xue, Haiyan & Shi, Jin & Zhang, Xindong & Ding, Shusheng, 2025. "The spillover effect of IPO technology risk information on stock price synchronization: Evidence from China," Finance Research Letters, Elsevier, vol. 74(C).
    18. Yang Zhang & Yaling Deng & Ourong Yang & De Xia & Haiyun Liu, 2024. "Substantive or symbolic ? The strategic choice of sustainable environmental strategy for enterprises induced by the new environmental protection law," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(6), pages 7461-7481, December.
    19. Mona A. ElBannan & Omar Farooq, 2019. "When are earnings informative?," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 12(3), pages 388-406, June.
    20. Dong, Guangwu & Tian, Chengrun & Wang, Xining & Wang, Sanchuan, 2024. "Analyst coverage and corporate financing," Finance Research Letters, Elsevier, vol. 59(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:74:y:2025:i:c:s1544612324017100. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.