Document Type
Journal article
Source Publication
Management Science
Publication Date
7-2015
Volume
61
Issue
7
First Page
1630
Last Page
1647
Keywords
investor sentiment, stock prices, corporate transparency, China, emerging market
Abstract
Using China's stock market as the testing venue, this study examines how corporate transparency helps explain the sensitivity of stock prices to general investor sentiment. We find that firms with low corporate transparency, measured by a battery of proxies including state ownership, the prevalence of related party transactions, accrual-based earnings management, audit opinions, and the quality of audit firms, are more affected by investor sentiment than are firms with high corporate transparency. Overall, our findings highlight the importance of corporate transparency in mitigating the effects of investor sentiment on stock prices.
DOI
10.1287/mnsc.2014.1911
Print ISSN
00251909
E-ISSN
15265501
Publisher Statement
Copyright © 2014, INFORMS
Access to external full text or publisher's version may require subscription.
Full-text Version
Accepted Author Manuscript
Language
English
Recommended Citation
Firth, M., Wong, K. P., & Wong, S. M. L. (2015). Corporate transparency and the impact of investor sentiment on stock prices. Management Science, 61(7), 1630-1647. doi: 10.1287/mnsc.2014.1911