Firms’ delayed replies and investor confidence: Evidence from M&A comment letters in China

Mengrui Han, Qianwei Ying and Li Huang

Finance Research Letters, 2023, vol. 56, issue C

Abstract: This study examines the impact of firms’ delayed responses to M&A comment letters on investor confidence. Using data from Internet stock message boards between 2015 and 2019 in China, we find that delayed responses by listed companies have a significant adverse effect on investor confidence, and this effect is more pronounced in firms with lower information transparency. Further, we examine firms’ stock market performance after the stock trading resumption date and find that companies with delayed responses experience significantly lower cumulative abnormal returns.

Keywords: Delayed response; Comment letter; Investor confidence; The Signaling effect (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:56:y:2023:i:c:s154461232300497x

DOI: 10.1016/j.frl.2023.104125

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