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Catalyzing transparency: Proactive enforcement of information disclosure and its impact on stock price synchronicity

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  • Guo, Shijun
  • Hu, Fang

Abstract

Focusing on the Industry Information Disclosure Guides (IIDGs) in China’s stock markets, we investigate the impact of firm-specific industry information disclosure on stock price synchronicity under proactive public enforcement. Employing a difference-in-differences analysis around industry-targeted events, we find a significant reduction in stock price synchronicity among companies in focus sectors compared to those in non-focus sectors following the introduction of industry-specific disclosure regulations. This reduction is distinguishing industry-level from market-level synchronicity and spilling over to non-regulated industries through manager learning channel, emphasizing the unique information features of IIDGs at the industry level. Additional tests demonstrate the heightened significance of IIDGs in poor information environment, particularly for companies with opaque financial reporting, with limited private oversight and operating in less competitive markets. Our findings provide valuable insights into the interplay between disclosure mechanisms and information environment in emerging markets.

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  • Guo, Shijun & Hu, Fang, 2025. "Catalyzing transparency: Proactive enforcement of information disclosure and its impact on stock price synchronicity," Journal of Contemporary Accounting and Economics, Elsevier, vol. 21(1).
    • Handle: RePEc:eee:jocaae:v:21:y:2025:i:1:s1815566925000025
    DOI: 10.1016/j.jcae.2025.100455
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    More about this item

    Keywords

    Disclosure regulation; Stock price synchronicity; Firm-specific information; Enforcement;
    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
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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