To protect or to hide: An investigation on corporate redacted disclosure motives under new FAST act regulation

China adopted amendments allowing companies to redact filings without prior approval in 2016. Leveraging this change as a quasi-nature experiment, we explore whether managers utilize redacted information to withhold bad information in the more lenient regulatory environment. Our investigation uncove...

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Main Authors:	MA, Yan, MAO, Qian, HU, Nan
Format:	text
Language:	English
Published:	Institutional Knowledge at Singapore Management University 2024
Subjects:	Redacted disclosure Proprietary information Bad news withholding Corporate Finance Databases and Information Systems
Online Access:	https://ink.library.smu.edu.sg/sis_research/8812 https://ink.library.smu.edu.sg/context/sis_research/article/9815/viewcontent/Protect0rHide_av.pdf
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Institution:	Singapore Management University
Language:	English

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spelling	sg-smu-ink.sis_research-98152024-06-04T06:24:58Z To protect or to hide: An investigation on corporate redacted disclosure motives under new FAST act regulation MA, Yan MAO, Qian HU, Nan China adopted amendments allowing companies to redact filings without prior approval in 2016. Leveraging this change as a quasi-nature experiment, we explore whether managers utilize redacted information to withhold bad information in the more lenient regulatory environment. Our investigation uncovers a significant shift in managerial behavior: Since 2016, managers incline to employ redactions to obscure negative news rather than safeguarding proprietary data. Furthermore, we find that the poorer firm performance and a higher cost of equity are associated with the redacted disclosures after 2016, suggesting that investors perceive an increase in firm-specific risk attributed to withholding bad news through redactions. 2024-06-01T07:00:00Z text application/pdf https://ink.library.smu.edu.sg/sis_research/8812 info:doi/10.1016/j.ememar.2024.101144 https://ink.library.smu.edu.sg/context/sis_research/article/9815/viewcontent/Protect0rHide_av.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection School Of Computing and Information Systems eng Institutional Knowledge at Singapore Management University Redacted disclosure Proprietary information Bad news withholding Corporate Finance Databases and Information Systems
institution	Singapore Management University
building	SMU Libraries
continent	Asia
country	Singapore Singapore
content_provider	SMU Libraries
collection	InK@SMU
language	English
topic	Redacted disclosure Proprietary information Bad news withholding Corporate Finance Databases and Information Systems
spellingShingle	Redacted disclosure Proprietary information Bad news withholding Corporate Finance Databases and Information Systems MA, Yan MAO, Qian HU, Nan To protect or to hide: An investigation on corporate redacted disclosure motives under new FAST act regulation
description	China adopted amendments allowing companies to redact filings without prior approval in 2016. Leveraging this change as a quasi-nature experiment, we explore whether managers utilize redacted information to withhold bad information in the more lenient regulatory environment. Our investigation uncovers a significant shift in managerial behavior: Since 2016, managers incline to employ redactions to obscure negative news rather than safeguarding proprietary data. Furthermore, we find that the poorer firm performance and a higher cost of equity are associated with the redacted disclosures after 2016, suggesting that investors perceive an increase in firm-specific risk attributed to withholding bad news through redactions.
format	text
author	MA, Yan MAO, Qian HU, Nan
author_facet	MA, Yan MAO, Qian HU, Nan
author_sort	MA, Yan
title	To protect or to hide: An investigation on corporate redacted disclosure motives under new FAST act regulation
title_short	To protect or to hide: An investigation on corporate redacted disclosure motives under new FAST act regulation
title_full	To protect or to hide: An investigation on corporate redacted disclosure motives under new FAST act regulation
title_fullStr	To protect or to hide: An investigation on corporate redacted disclosure motives under new FAST act regulation
title_full_unstemmed	To protect or to hide: An investigation on corporate redacted disclosure motives under new FAST act regulation
title_sort	to protect or to hide: an investigation on corporate redacted disclosure motives under new fast act regulation
publisher	Institutional Knowledge at Singapore Management University
publishDate	2024
url	https://ink.library.smu.edu.sg/sis_research/8812 https://ink.library.smu.edu.sg/context/sis_research/article/9815/viewcontent/Protect0rHide_av.pdf
_version_	1814047564066979840

To protect or to hide: An investigation on corporate redacted disclosure motives under new FAST act regulation

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