【公开学术报告】Say More or Say Less? Firms’ Voluntary Supply Chain Disclosure Under Short-Selling Pressure

Say More or Say Less? Firms’ Voluntary Supply Chain Disclosure Under Short-Selling Pressure

Guest Speaker:            Ziliang ZHAN (Tsinghua University)

Date & Time:              9:30-11:00 (Beijing Time), Thur. 16^th, Nov. 2023

Classroom:           Room 2101, Tongji Building A

ABSTRACT

Our study examines an important yet puzzling question: How would firms adjust their voluntary supply chain disclosure in response to short-selling pressure. Drawing on the insights of signaling theory and threat rigidity theory, we highlight two basic concerns that drive firms to change supply chain disclosure amid short-selling pressure: proactively countering the capital market uncertainties with the signaling benefits of supply chain disclosure and avoiding the information leakage risks of supply chain disclosure amid short-selling threats. Time-varying DID analyses based on the evidence from the short selling deregulation program in China reveal intriguing findings: Facing short-selling pressure, firms would engage in “partial disclosure” to both enjoy the benefits of supply chain disclosure and avoid the risks thereof: They are more likely to disclose the identities of their major customers to signal their earnings prospects and future returns and countervail short-selling pressure. In the meanwhile, they would also reduce the disclosure of the identities of their major suppliers to avoid unnecessary information leakage that may be abused by short sellers. Together, the total number of supply chain partner identities disclosed by the firms would largely remain unchanged amid short-selling pressure. In addition, such relationships between short-selling pressure and supply chain disclosure are further contingent on firms’ social capital, supply chain costs, and innovativeness.