Newspaper Censorship in China: Evidence from Tunneling Scandals

Ole-Kristian Hope Hope, Yi Li, Qiliang Liu and Han Wu
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Ole-Kristian Hope Hope: University of Toronto
Yi Li: Hunan University
Qiliang Liu: Wuhan University
Han Wu: HEC Paris

No 1389, HEC Research Papers Series from HEC Paris

Abstract: Media dissemination plays an important role in facilitating price discovery. Political pressure that restricts media dissemination can hinder this function and affect investors’ perceptions. This paper studies the magnitude of newspaper censorship in China and its economic consequences using a setting of “tunneling” scandals. We find significant evidence of censorship of tunneling-related negative news at the national and local level. We further show that news that survives censorship reduces information asymmetry and improves pricing efficiency. We find that censorship blocks informative tunneling news and delays incorporation of tunneling reporting into prices.

Keywords: Censorship; Media Dissemination; Newspapers; China; Local Protection; Information Environment; Tunneling; Financial Disclosure (search for similar items in EconPapers)
JEL-codes: G15 G18 G30 G32 M10 M40 M41 M48 (search for similar items in EconPapers)
Pages: 63 pages
Date: 2020-09-18
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:1389

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