A Empirical Study On The Causes And Market Reactions Of Public Censure Of Listed Companies In China

To protect the investors’ interests, the information disclosure of listed companiesmust be timely, accurate, true and complete. Public Censure, as one of the systems tomaintain the quality of information disclosed, has been implemented for many years,and quite a lot listed companies has been censured publicly for violating the rules ofinformation disclosure. Whether public censure affected the stock price of listedcompanies, and whether different censure reasons caused different degree of pricevariation, this paper will do researches.This paper firstly review the rules of information disclosure system and theprevious relevant research literature, and then do the descriptive statistics of the existingPublic Censure, the empirical researches of stock price variation affected by the PublicCensure, and the analysis of different degree of price variation caused by the differentcensure reasons. The results showed that: It is the violation of disclosure rules about thetransactions between related parties and the occupation of related funds causes the mostPublic Censure. The proportion of listed companies censured again is comparative high,and Public Censure is not effective enough. Public Censure brought negativeinformation, and caused significant negative abnormal returns. There are differentefficiency among the different markets, different companies,different censurenumber,different years and different censure reason.At last, this paper gives some policy suggestions on the phenomenon that PublicCensure caused the decline of stock price, but lack effective deterrence to listedcompanies, and make the small and medium investors suffer economical losses.