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Newspaper Censorship in China: Evidence from Tunneling Scandals

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  • Ole-Kristian Hope

    (Rotman School of Management, University of Toronto, Toronto, Ontario M5S 3E6, Canada; BI Norwegian Business School, 0484 Oslo, Norway)

  • Yi Li

    (Business School, Hunan University, Changsha, Hunan 410000, China)

  • Qiliang Liu

    (School of Accountancy, Jiangxi University of Finance and Economics, Nanchang 330013, China)

  • Han Wu

    (Department of Accounting and Management Control, École des Hautes Études Commerciales de Paris (HEC Paris), 78350 Jouy-en-Josas, France)

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 levels. We further show that news that survives censorship reduces information asymmetry and improves pricing efficiency. Censorship blocks informative tunneling news and delays incorporation of tunneling reporting into prices.

Suggested Citation

  • Ole-Kristian Hope & Yi Li & Qiliang Liu & Han Wu, 2021. "Newspaper Censorship in China: Evidence from Tunneling Scandals," Management Science, INFORMS, vol. 67(11), pages 7142-7166, November.
    • Handle: RePEc:inm:ormnsc:v:67:y:2021:i:11:p:7142-7166
    DOI: 10.1287/mnsc.2020.3804
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    References listed on IDEAS

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    1. Yang, Shanye & Ying, Qianwei & Liu, Jinsong, 2023. "Does regulatory punishment improve financial media’s information intermediary role?," Economics Letters, Elsevier, vol. 232(C).

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