Silence is golden? Responses to rumors by Chinese listed firms

Kaiyi Liu; Xianghui Yuan; Chen Wang; Wenxuan Hou

doi:10.1016/j.frl.2022.103055

Silence is golden? Responses to rumors by Chinese listed firms

Kaiyi Liu, Xianghui Yuan^*, Chen Wang, Wenxuan Hou

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

Abstract / Description of output

Rumors are common in capital markets and firms face a strategic decision of whether or not to respond to them. This research explores the implications of official response to rumors and find that responded firms tend to experience enforcement actions against corporate fraud and lawsuits. The results are concentrated on private firms. Our results are in line with the agency theory interpretation of firms’ response to rumors.

Original language	English
Article number	103055
Journal	Finance Research Letters
Volume	49
Early online date	8 Jun 2022
DOIs	https://doi.org/10.1016/j.frl.2022.103055
Publication status	Published - Oct 2022

Keywords / Materials (for Non-textual outputs)

corporate governance
fraud
information environment
lawsuit
rumor

Access to Document

10.1016/j.frl.2022.103055

LiuEtalFRL2022SilenceIsGoldenAccepted author manuscript, 1.05 MBLicence: CC BY-NC-ND

Cite this

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title = "Silence is golden? Responses to rumors by Chinese listed firms",

abstract = "Rumors are common in capital markets and firms face a strategic decision of whether or not to respond to them. This research explores the implications of official response to rumors and find that responded firms tend to experience enforcement actions against corporate fraud and lawsuits. The results are concentrated on private firms. Our results are in line with the agency theory interpretation of firms{\textquoteright} response to rumors.",

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author = "Kaiyi Liu and Xianghui Yuan and Chen Wang and Wenxuan Hou",

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AU - Liu, Kaiyi

AU - Yuan, Xianghui

AU - Wang, Chen

AU - Hou, Wenxuan

PY - 2022/10

Y1 - 2022/10

N2 - Rumors are common in capital markets and firms face a strategic decision of whether or not to respond to them. This research explores the implications of official response to rumors and find that responded firms tend to experience enforcement actions against corporate fraud and lawsuits. The results are concentrated on private firms. Our results are in line with the agency theory interpretation of firms’ response to rumors.

AB - Rumors are common in capital markets and firms face a strategic decision of whether or not to respond to them. This research explores the implications of official response to rumors and find that responded firms tend to experience enforcement actions against corporate fraud and lawsuits. The results are concentrated on private firms. Our results are in line with the agency theory interpretation of firms’ response to rumors.

KW - corporate governance

KW - fraud

KW - information environment

KW - lawsuit

KW - rumor

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U2 - 10.1016/j.frl.2022.103055

DO - 10.1016/j.frl.2022.103055

M3 - Article

AN - SCOPUS:85131967380

SN - 1544-6123

VL - 49

JO - Finance Research Letters

JF - Finance Research Letters

M1 - 103055

ER -

Silence is golden? Responses to rumors by Chinese listed firms

Abstract / Description of output

Keywords / Materials (for Non-textual outputs)

Access to Document

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