Research | Ding Yi and Wang Xiaoqiao: Are There Externalities of Private Firm News Disclosure? Evidence from Public Firms' Investment
As today’s capital market becomes increasingly diversified, news disclosure is of great significance for the firm itself and other firms to make scientific decisions and improve the overall efficiency of the market. Earlier, the Beijing Stock Exchange (BSE) launched the Action Plan to Improve the Quality of BSE Listed Companies, with an emphasis on the quality improvement of information disclosure, which shows the importance of news disclosure to the overall economy and the development of public firms. However, in many academic studies and policy concerns, the impact of news disclosure by private firms on the market is often neglected.
Are There Externalities of Private Firm News Disclosure? Evidence from Public Firms’ Investment, a joint research by Professor Ding Yi and Professor Wang Xiaoqiao, both from the School of Management and Economics (SME), The Chinese University of Hong Kong, Shenzhen (CUHK-Shenzhen); Professor Chen Feng from the University of Toronto; Professor Du Xingqiang from Xiamen University; and Professor Kevin Tseng from The Chinese University of Hong Kong and National Taiwan University, proposes that public firms will raise their investment sensitivities and efficiency with more active disclosure by private firms in the same industry. Besides, the article finds that these effects are amplified in industries with higher expectation uncertainties and limited alternative channels for understanding private firms. In addition, positive externality is not affected by textual emotions in the disclosure. The research highlights the crucial role of private firm disclosures in influencing public firms’ investment decisions and reveals potential externalities of private firm disclosures. The research paper was accepted by The Accounting Review, a top international journal in accounting.
About the Author
Ding Yi
Assistant Professor, SME, CUHK-Shenzhen
Research
China’s Financial System, Corporate Disclosure
Wang Xiaoqiao
Assistant Professor, SME, CUHK-Shenzhen
Research
Corporate Finance, Financial Accounting, Information Media, and Field Experiment
Co-authors
Feng Chen
University of Toronto
Xingqiang Du
Xiamen University
Kevin Tseng
The Chinese University of Hong Kong
National Taiwan University
