Bourveau, Thomas; Gao, Xingchao; Li, Rongchen; Zhou, Frank - 2023
We investigate a 2012 pay-or-explain regulation implemented by China's Shanghai Stock Exchange. The regulation mandates …-in-differences estimates suggest that firms subject to the regulation decreased their tunneling, irrespective of whether they comply by paying …. Collectively, these findings provide novel policy evidence on how a flexible pay-or-explain form of regulation can reduce agency …