1. Newspaper Censorship in China: Evidence from Tunneling Scandals
- Author
-
Hope, Ole-Kristian, Li, Yi, Liu, Qiliang, Wu, Han, Ecole des Hautes Etudes Commerciales (HEC Paris), HEC Paris Research Paper Series, and Haldemann, Antoine
- Subjects
China ,JEL: G - Financial Economics/G.G3 - Corporate Finance and Governance/G.G3.G30 - General ,Tunneling ,Censorship ,Local Protection ,JEL: G - Financial Economics/G.G1 - General Financial Markets/G.G1.G18 - Government Policy and Regulation ,JEL: G - Financial Economics/G.G3 - Corporate Finance and Governance/G.G3.G32 - Financing Policy • Financial Risk and Risk Management • Capital and Ownership Structure • Value of Firms • Goodwill ,JEL: M - Business Administration and Business Economics • Marketing • Accounting • Personnel Economics/M.M4 - Accounting and Auditing/M.M4.M40 - General ,Media Dissemination ,Information Environment ,JEL: M - Business Administration and Business Economics • Marketing • Accounting • Personnel Economics/M.M1 - Business Administration/M.M1.M10 - General ,JEL: M - Business Administration and Business Economics • Marketing • Accounting • Personnel Economics/M.M4 - Accounting and Auditing/M.M4.M41 - Accounting ,Financial Disclosure ,JEL: G - Financial Economics/G.G1 - General Financial Markets/G.G1.G15 - International Financial Markets ,[SHS.GESTION]Humanities and Social Sciences/Business administration ,JEL: M - Business Administration and Business Economics • Marketing • Accounting • Personnel Economics/M.M4 - Accounting and Auditing/M.M4.M48 - Government Policy and Regulation ,[SHS.GESTION] Humanities and Social Sciences/Business administration ,Newspapers - Abstract
Media dissemination plays an important role in facilitating price discovery. Political pressure that restricts media dissemination can hinder this function and affect investors’ perceptions. This paper studies the magnitude of newspaper censorship in China and its economic consequences using a setting of “tunneling” scandals. We find significant evidence of censorship of tunneling-related negative news at the national and local level. We further show that news that survives censorship reduces information asymmetry and improves pricing efficiency. We find that censorship blocks informative tunneling news and delays incorporation of tunneling reporting into prices.
- Published
- 2020