Take Action

Home | Faculty & Research Overview | Research

Research Details

The Role of Private Disclosures in Markets with Weak Institutions: Evidence from Market Liberalization in China

Abstract

I use the announcement of a market liberalization pilot program in China as a shock to firms’ disclosure environment and examine how the Chinese firms, foreign investors, and foreign brokers respond. Using a proprietary dataset, I find that affected firms respond to announcement by significantly increasing the number of selective private meetings hosted by major foreign brokers, but do not use public disclosure channels. I find this increase in private disclosure to be stronger among firms that had strong public disclosure track record and are in need of capital. Firms that increased private disclosure experience improvements in speed of price discovery and liquidity. In addition, they also experience an increase in foreign holdings and raise capital abroad through foreign brokers after the pilot program’s implementation. Overall, this paper takes a yet-to-mature economy, presents evidence on dynamic shaping of disclosure, and highlights private disclosure as an important positive channel of communication.

Type

Working Paper

Author(s)

Aaron Yoon

Date Published

2018

Citations

Yoon, Aaron. 2018. The Role of Private Disclosures in Markets with Weak Institutions: Evidence from Market Liberalization in China.

KELLOGG INSIGHT

Explore leading research and ideas

Find articles, podcast episodes, and videos that spark ideas in lifelong learners, and inspire those looking to advance in their careers.
learn more

COURSE CATALOG

Review Courses & Schedules

Access information about specific courses and their schedules by viewing the interactive course scheduler tool.
LEARN MORE

DEGREE PROGRAMS

Discover the path to your goals

Whether you choose our Full-Time, Part-Time or Executive MBA program, you’ll enjoy the same unparalleled education, exceptional faculty and distinctive culture.
learn more

Take Action