Open AccessImpact Of Information Disclosure Violation On Firm Value In Chinese Listed Firms
Author(s) -
Li B
Publication year - 2016
Publication title -
journal of applied business research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.149
H-Index - 22
eISSN - 2157-8834
pISSN - 0892-7626
DOI - 10.19030/jabr.v32i3.9663
Subject(s) - enterprise value , enforcement , business , commission , value (mathematics) , proxy (statistics) , asset (computer security) , accounting , china , market value added , monetary economics , finance , economics , law , computer science , computer security , machine learning , political science
We analyze the association between information disclosure violation (IDV) and firm value, based on a sample of Chinese listed firms that were subject to China Securities Regulatory Commission (CSRC) enforcement actions from 2000 to 2014. Using Tobin’s Q as a proxy for firm value at the end of the enforcement action year, we find that firm value in violating firms is significantly lower than firm value in non-violating firms. Further, we find IDV with the following characteristics can cause serious damage to firm value: IDV related to inflated profit or asset fabrication have a more damaging effect on firm value; the total number of violation types, fines and the total number of admonishment types are negatively associated with firm value; violation frequency and number of years between violations and CSRC enforcement action are negatively related to firm value.