Premium
The 2015 Chinese Food Safety Law and market quality
Author(s) -
Wang Qizhi,
Ota Rui
Publication year - 2019
Publication title -
pacific economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.34
H-Index - 33
eISSN - 1468-0106
pISSN - 1361-374X
DOI - 10.1111/1468-0106.12291
Subject(s) - china , food safety , quality (philosophy) , food market , stock market , stock (firearms) , event study , business , economics , chinese market , food quality , marketing , law , engineering , political science , geography , agriculture , food science , mechanical engineering , philosophy , chemistry , context (archaeology) , archaeology , epistemology
Safety standards, including food safety laws, provide necessary infrastructure to improve market quality. The present study investigates the impact of the revised Chinese Food Safety Law on the quality of China's food market. Using an event study approach, we empirically analyse the impact of nine official news events relating to the new Food Safety Law on the stock prices of companies engaged in food‐related businesses. The study demonstrates that three news events have a statistically significant and robust impact, and that all the events have a negative influence on the prices. The results show the possibility of a drop in market quality in the short term in the process of improving quality.