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Newspaper Censorship in China: Evidence from Tunneling Scandals

Author

Listed:
  • Hope, Ole-Kristian Hope

    (University of Toronto)

  • Li, Yi

    (Hunan University)

  • Liu, Qiliang

    (Wuhan University)

  • Wu, Han

    (HEC Paris)

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.

Suggested Citation

  • Hope, Ole-Kristian Hope & Li, Yi & Liu, Qiliang & Wu, Han, 2020. "Newspaper Censorship in China: Evidence from Tunneling Scandals," HEC Research Papers Series 1389, HEC Paris.
    • Handle: RePEc:ebg:heccah:1389
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    More about this item

    Keywords

    Censorship; Media Dissemination; Newspapers; China; Local Protection; Information Environment; Tunneling; Financial Disclosure;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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