{"title":"Comment letter regulation and stock price synchronicity: evidence from China","authors":"Feng Cao, Xueyan Zhang, Jin Liu","doi":"10.1080/16081625.2021.1993073","DOIUrl":null,"url":null,"abstract":"ABSTRACT This paper investigates whether comment letter (CL) regulation affects stock price synchronicity. We find solid evidence that stock exchanges’ CL process can significantly reduce synchronicity, and this effect is attenuated by political connection and state ownership. Further study shows that the negative correlation is more pronounced when CLs address major accounting issues, target firms take longer time to prepare responses, and the responses are accompanied with verifications from related third parties. Our results confirm the positive role of the CL regulation in enhancing firm-specific information disclosure and have implications for the improvement of market efficiency in emerging nations.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"51 1","pages":"569 - 593"},"PeriodicalIF":1.4000,"publicationDate":"2021-10-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"3","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Asia-Pacific Journal of Accounting & Economics","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1080/16081625.2021.1993073","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 3
Abstract
ABSTRACT This paper investigates whether comment letter (CL) regulation affects stock price synchronicity. We find solid evidence that stock exchanges’ CL process can significantly reduce synchronicity, and this effect is attenuated by political connection and state ownership. Further study shows that the negative correlation is more pronounced when CLs address major accounting issues, target firms take longer time to prepare responses, and the responses are accompanied with verifications from related third parties. Our results confirm the positive role of the CL regulation in enhancing firm-specific information disclosure and have implications for the improvement of market efficiency in emerging nations.
期刊介绍：
The Asia-Pacific Journal of Accounting & Economics (APJAE) is an international forum intended for theoretical and empirical research in all areas of economics and accounting in general. In particular, the journal encourages submissions in the following areas: Auditing, financial reporting, earnings management, financial analysts, the role of accounting information, international trade and finance, industrial organization, strategic behavior, market structure, financial contracts, corporate governance, capital markets, and financial institutions. The journal welcomes contributions related to the Asia Pacific region, and targets top quality research from scholars with diverse regional interests. The editors encourage submission of high quality manuscripts with innovative ideas. The editorial team is committed to an expedient review process.
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