Corporate site visits, private monitoring and fraud: Evidence from China

David Broadstock and Xiaoqi Chen

Finance Research Letters, 2021, vol. 40, issue C

Abstract: Corporate site visits (CSVs) offer outsiders an opportunity to directly communicate with corporate managers. Through such visits, investors can not only acquire information from managers but also offer outside knowledge and/or personal suggestions to the managers. We conjecture that CSVs play a private monitoring role that will dissuade managers from dishonest or fraudulent financial practices. Using Chinese data, we show that the frequency of site visits is negatively related to the incidence of both corporate and managerial fraud. Our findings have implications for understanding the governance role of private monitoring.

Keywords: Corporate site visits; Corporate governance; Fraud; Private monitoring (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:40:y:2021:i:c:s1544612320315944

DOI: 10.1016/j.frl.2020.101780

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