Purpose – Using a sample of 9,898 firm-year observations from 1,821 unique Chinese listed firms over the period from 2004 to 2019, this study aims to investigate whetherthe marketrewards meeting or beating analyst earnings expectations (MBE). Design/methodology/approach –The authors use an event study methodology to capture marketreactions to MBE. Findings – The authors document a stock return premium for beating analyst forecasts by a wide margin. However,there is no stock return premium forfirms that meet orjust beat analystforecasts, suggesting that the market is skeptical of earnings management by these firms. This market underreaction is more pronounced for firms with weak external monitoring. Further analysis shows that meeting or just beating analyst forecasts is indicative of superior future financial performance. The authors do not find firms using earnings management to meet or just beat analyst forecasts. Research limitations/implications – The authors provide evidence of market underreaction to meeting or just beating analyst forecasts, with the market’s over-skepticism of earnings management being a plausible mechanism for this phenomenon. Practical implications – The findings of this study are informative to researchers, market participants and regulators concerned about the impact of analysts and earnings management and interested in detecting and constraining managers’ earnings management. Originality/value – The authors provide new insights into how the market reacts to MBE by showing that the market appears to focus on using meeting or just beating analyst forecasts as an indicator of earnings management, while it does not detect managed MBE. Meeting or just beating analyst forecasts is commonly used as a proxy for earnings management in the literature. However, the findings suggest that it is a noisy proxy for earnings management.

We use the event study method to assess the impact of China's National Centralized Drug Procurement (NCDP) policy on the stock price of A-share listed companies in pharmaceutical industry. And the empirical evidence reveals that the policy has a negative effect on the share prices of firms won the bids in the past six centralized procurement. The stock prices of winning bidders were more negatively affected than those of non-winning bidders. If the winning bid price continues to be depressed, we cannot rule out the possibility of a collective abandonment of bidding by quality manufacturers.

Factoring financing is the most widely used form of supply chain finance, which has been adopted by more and more enterprises. The existing literature focuses on the motivation of suppliers to adopt factoring financing and the factors that affect the development of factoring. However, little attention is paid to the results of factoring. This study uses the event study method, draws on the Extended Resource based theory (ERBT), discussing how the factoring business announcement affects the stock market value of listed companies from the perspective of competitive advantage and the firm's own characteristics. By manually collecting 205 factoring business announcements from 115 Chinese listed companies from October 2019 to December 2022, we found that: (1) from the perspective of competitive advantage, the announcement of factoring business by non-Combination of Industry and Finance enterprises or their holding enterprises has more positive impact on the stock price of the enterprises. There is no obvious relationship between the size of factoring quota and stock price. (2) From the perspective of the enterprise's own characteristics, the announcement of factoring business by state-owned enterprises and small-scale enterprises can have a positive impact on the stock price of the enterprise. Before and after the Civil Code came into effect, there was no significant difference in the relationship between factoring business announcements and stock prices. This study uses secondary data to fill the gap in the study of the impact of factoring announcements on stock market value. This paper discusses the relationship between factoring business announcement and stock market value from the perspective of competitive advantage for the first time, providing theoretical guidance for managers to adopt factoring business under what circumstances. In addition, this study also provides documentation for the empirical study of factoring business announcements in China.

This paper studies how regulatory changes affect investors’ reactions at shareholder meetings in China. The objective of this paper is twofold: first, to analyse the information content transmitted to the shareholders of the largest Chinese companies listed on the China Securities Index 300 when an Annual General Meeting is held. A distinction is made between ordinary and extraordinary general meetings. Second, to find out if regulatory changes related to the Company Law of China and online voting in Annual General Meetings affect the information content of those meetings. The abnormal return obtained is examined through an event study using the Fama-French five-factor model. The results of our study indicate that the release of information and involvement of minority shareholders in general meetings during the research period led to higher return volatility and traded volume.

During the past decade, Wechat-public-accounts (WPAs) have gained increasing popularity as a novel tool for voluntary disclosure among Chinese public firms. This paper examines whether WPA disclosures provide value-relevant information to the market. Using a topic model to process over 1.6 million WPA articles during 2012-2020 and an event study design, we find that the stock market reacts strongly following a WPA disclosure event and the magnitude varies with the topic and textual feature of the WPA articles. We further present evidence that firms use their WPAs to provide new information rather than reinforce information that is already presented in other channels. Moreover, financial analysts, journalists, and retail investors rely on corporate WPAs for their information production. Collectively, our findings indicate that corporate WPAs are an economically significant source of new information for market participants that supplement traditional disclosure channels considered in prior studies.

This study investigates and compares the effects of the Coronavirus Disease 2019 (COVID-19) pandemic, the Chicago Mercantile Exchange (CME)'s negative price suggestion on prices and trading activities in the crude oil futures market to discuss the cause of negative crude oil futures prices. Through event studies, our results show that the COVID-19 pandemic no longer impacts crude oil futures prices in April after controlled market risk, while the CME’s negative prices suggestion can explain the crude oil futures price changes around and around even after April 8 to some degree. Moreover, our study uncovers anomalies in prices and trading activities by analyzing returns, trading volume, open interest, and illiquidity measures using vector autoregressive (VAR) models. The results imply that CME’s allowing negative prices strengthens the price impact on trading volume and makes illiquidity risk matter. Our results coincide with the following lawsuit evidence of market manipulation.

Using a unique list of 528 fake state-owned enterprises (SOEs) exposed in China, we examine whether and how investors react to the government’s property rights protection actions. Our results show that real SOEs with more subsidiaries, pyramid layers, and popularity are more likely to be targeted by wrongdoers. We find that when fake SOEs were exposed, it caused a significant increase in the stock prices of listed central SOEs controlled by the State Council. Further analysis shows that the stock price rise is driven by both the cash flow and risk effects. We also find that the value impact of the crackdown is more pronounced for listed central SOEs with less media coverage, located in weaker legal protection regions, and facing more competition. Overall, our findings provide empirical support for the effectiveness of exposure, as a non-litigation channel of property rights protection, in enhancing firm value.

Employing an event study approach on the US-China trade conflict, we find that Chinese listed firms with institutional investor holdings exhibit smaller announcement loss than their counterparts. We also examine the heterogeneous effects of firms. Specifically, the positive effect of institutional investor holding is larger for firms with foreign exposure or in provinces with higher degree of marketization. Besides, institutional investor holding also reduces firms' financial cost of refinancing and improves their long-run performance given the same announcement loss. These findings help understand the role of institutional investor in achieving financial stability from the micro perspective.

In the dollar-denominated corporate bond market, 42% of bonds with an amount outstanding of USD 5.9 Trillion are issued by non-US firms. Despite the increasing importance of cross-border financing, foreign issuers are paying an extra premium of 23 bps, compared with their US counterparts. A similar foreign discount exists in the euro-denominated corporate bond and dollar-denominated sovereign bond market. Contrary to the common view, the standard risk and risk aversion cannot explain the discount. I propose a theoretical explanation based on uncertainty aversion. The model can generate the uncertainty effect in the cross-section and the volatility effect in the time series, both are supported by the data. Taking Covid-19 as an event study, I further document a foreign squeeze effect by showing that foreign dollar bonds suffer higher selling pressure relative to US dollar bonds during market turmoil. Such foreign discount (USA effect) dominates the dollar safety premium (USD effect). My results highlight the foreign discount and foreign squeeze effects in the international cross-border investment and financing.

We use China's recent anti-corruption campaign as a natural experiment to examine the (market expected) equilibrium consequences of (anti-)corruption. We argue that the announcement of inspections of provincial governments by the Central Commission for Discipline Inspection (CCDI) on May 17, 2013 represents a significant departure of past norms of anti-corruption campaigns, and thus serves a rare empirical opportunity to examine the equilibrium effects of anti-corruption campaigns for firms. We first present a conceptual framework to illustrate the channels through which anti-corruption actions can influence firms. Using an event study approach and May 17, 2013 as the event date, we find that, overall, the stock market responded positively to the announcement of strong anti-corruption actions. The announcement returns are significantly lower for luxury-goods producers, and SOES, large firms, or politically connected firms earn lower returns than private, small, or non-connected firms. We also find that existing local institutions play a crucial role in determining the announcement returns across firms. Moreover, a long-term difference-in-differences analysis shows that higher returns during the event window are associated with more subsequent entries of new firms and faster expansions of existing firms. Finally, we also provide direct evidence consistent with the endogenous grits effect.