A Study on Internet Chinese Companies’ Response to “The Holding Foreign Companies Accountable Act”

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DOI

10.2991/978-94-6463-272-9_11How to use a DOI?

Keywords

Internet Chinese Companies; The Holding Foreign Companies Accountable Act; Event Study

Abstract

At the beginning of the 21st century, a large number of Chinese companies went public in the United States due to many advantages such as easier access to financing, better corporate governance structure, and different listing conditions. However, in January 2020, with the disclosure of a short-selling report on Luckin Coffee’s year-long financial data falsification and fraud, Luckin Coffee’s trading was officially suspended on NASDAQ in June 2020, accompanied by a high level of concern from international capital markets about Chinese stocks. Within the following year, the US Senate introduced the Foreign Company Accountability Act, which tightened securities market regulations at the legal level and raised the threshold for companies from “unenforceable inspection” regions, including China, to list in the US. Data shows that more than 90% of the listed companies facing mandatory delisting as a result of the Foreign Company Accountability Act are Chinese companies. This paper provides a preliminary behavioral analysis of Chinese stocks by examining the paths taken by several Chinese stocks in response to the conflicting effects of the Foreign Company Accountability Act and the Chinese corporate system, and the subsequent results achieved.

Copyright

© 2024 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Guowei Chen
AU  - Shulin Ruan
AU  - Xiaotong Wang
PY  - 2023
DA  - 2023/10/15
TI  - A Study on Internet Chinese Companies’ Response to “The Holding Foreign Companies Accountable Act”
BT  - Proceedings of the 2023 3rd International Conference on Financial Management and Economic Transition (FMET 2023)
PB  - Atlantis Press
SP  - 95
EP  - 109
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-272-9_11
DO  - 10.2991/978-94-6463-272-9_11
ID  - Chen2023
ER  -