Time: 14:30-16:00, April 21st
Location: Main Building 317
Reported by: Professor Yuan Rongli from Renmin University of China
Reported by:
Professor and doctoral supervisor of the School of Business at Renmin University of China, and a leading national accounting talent from the Ministry of Finance. The main research fields include corporate finance and corporate governance. More than 40 papers have been published in international and domestic core journals such as Journal of Banking&Finance, Journal of Corporate Finance, Journal of Business Finance&Accounting, Management World, etc. The outstanding professor of Business School of Renmin University of China, whose Accounting course was awarded the "High Quality Undergraduate Course" by Beijing universities, is the winner of the 13th "National Hundred Excellent Management Cases".
Introduction to report content:
We examine China’s July 2020 introduction of US style securities class action lawsuits (SCA). Unlike US evidence, Chinese stock prices respond positively to SCA introduction. This is consistent with a placebo test that finds insignificant responses for cross-listed stocks already subject to US SCA. Price reactions to temporary SCA rules suggest that discouraging frivolous lawsuits is beneficial. Effects are stronger for firms more exposed to SCA, particularly with poor disclosure or governance, state ownership, political connections, no D&O insurance, or less innovation. Firms react to SCA by initiating D&O insurance, selecting more reputable auditors, and improving internal controls and financial reporting. Thus, the threat of SCA risk appears to benefit shareholders.
(Undertaken by: Accounting Department, Research and Academic Center)
