Recently, a paper titled Investor-initiated Online Communications and Corporate Misconduct, co-authored by Professor Xu Sheng from the School of Finance at Zhongnan University of Economics and Law, was published online in Information & Management. Information & Management is a Q1 journal indexed in the Chinese Academy of Sciences journal ranking and is currently included in both SSCI and SCI. According to Web of Science, the journal has an impact factor of 8.2 and a five-year impact factor of 10.2, making it one of the influential journals in its field.

Abstract

The paper Investor-initiated Online Communications and Corporate Misconduct focuses on the regulated interactive investor platforms launched by Chinese stock exchanges in 2010 and 2013 to empower retail investors. Investor-initiated interactions on these platforms are negatively correlated with the propensity for corporate misconduct. Interactive investor platforms can serve as an important tool for monitoring corporate misconduct and may be adopted by other regulatory jurisdictions. This study delves into the relationship between internet-based interactions among retail investors and the occurrence of corporate misconduct. Utilizing China’s investor-initiated interactive platforms, we find that online investor-initiated interactions reduce the likelihood of corporate misconduct. Our findings are robust through empirical analysis. The negative correlation between online investor-initiated interactions and the incidence of corporate misconduct is more pronounced in companies with higher levels of information asymmetry, while internal and external corporate control mechanisms do not eliminate this negative relationship. Our findings hold significant implications for policymakers, investors, and corporations. For policymakers and regulators, our results highlight the importance of the monitoring role of social media—particularly platforms subject to stringent regulation alongside internet technology advancements. Regulators can leverage internet technology to monitor investor-generated information, thereby improving the surveillance, detection, and prevention of misconduct in capital markets. For retail investors, our findings suggest that online interactive platforms enable them to access more precise information, potentially aiding in the protection of minority shareholders. For those responsible for internal and external corporate conduct controls, our findings indicate that investor-initiated interactions can serve as a "gatekeeper" in monitoring corporate misconduct.

Author Profile​

Xu Sheng is a Professor and Doctoral Supervisor at the School of Finance, Zhongnan University of Economics and Law. He also serves as the Director of the County Economy and Financial Engineering Research Center, Executive Dean of the Fintech Research Institute, and Deputy Director of the Hubei Collaborative Innovation Center for Industrial Upgrading and Regional Finance.