The Library
Media censorship and stock price : evidence from foreign share discount in China
Tools
Tools
Tools
Ding, Rong, Hou, Wenxuan, Liu, Lucy and Zhang, John (2018) Media censorship and stock price : evidence from foreign share discount in China. Journal of International Financial Markets, Institutions and Money, 55 . pp. 112-133. doi:10.1016/j.intfin.2018.02.005 ISSN 1042-4431.
Research output not available from this repository.
Request-a-Copy directly from author or use local Library Get it For Me service.
Official URL: https://doi.org/10.1016/j.intfin.2018.02.005
Abstract
This paper studies the price implication of media censorship in the context of the long-standing foreign share discount puzzle in China. We conjecture that the government censors negative news and promotes positive news in Chinese media, leading to the premium on A-shares, which are mainly traded by domestic investors. We find that the ratio of positive to negative news is substantially higher for Chinese newspapers than English newspapers. Such favouritism is found to inflate the price of domestic A-shares and contribute to the discount of foreign B-shares from the same firms. We also provide evidence that B-share investors pay more attention to bad news, while A-share investors pay more attention to good news. Our findings suggest that the news perception distorted by media censorship helps to explain the foreign share discount puzzle and has important implications for international capital flows.
| Item Type: | Journal Article | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Divisions: | Faculty of Social Sciences > Warwick Business School > Accounting Faculty of Social Sciences > Warwick Business School |
||||||||
| Journal or Publication Title: | Journal of International Financial Markets, Institutions and Money | ||||||||
| Publisher: | Elsevier BV | ||||||||
| ISSN: | 1042-4431 | ||||||||
| Official Date: | July 2018 | ||||||||
| Dates: |
|
||||||||
| Volume: | 55 | ||||||||
| Page Range: | pp. 112-133 | ||||||||
| DOI: | 10.1016/j.intfin.2018.02.005 | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | Published | ||||||||
| Access rights to Published version: | Restricted or Subscription Access | ||||||||
| Related URLs: |
Request changes or add full text files to a record
Repository staff actions (login required)
 |
View Item |
