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Strategic Public Shaming: Evidence from Chinese Antitrust Investigations

  • Angela Huyue Zhang (a1)
Abstract

This article examines strategic public shaming, a novel form of regulatory tactics employed by the National Development and Reform Commission (NDRC) during its enforcement of the Anti-Monopoly Law. Based on analysis of media coverage and interview findings, the study finds that the way that the NDRC disclosed its investigation is highly strategic depending on the firm's co-operative attitude towards the investigation. Event studies further show that the NDRC's proactive disclosure resulted in significantly negative abnormal returns of the stock prices of the firm subject to the disclosure. For instance, Biostime, an infant-formula manufacturer investigated in 2013, experienced −22 per cent cumulative abnormal return in a three-day event window, resulting in a loss of market capitalization that is 27 times the antitrust fine that it ultimately received. The NDRC's strategic public shaming might therefore result in severe market sanctions that deter firms from defying the agency.

本文考察了国家发展和改革委员会(“发展和改革委员会”)在执行反垄断法过程中采用的一种新型监管策略 – 战略性的公众羞辱。根据对媒体报道和访谈结果的分析,作者发现国家发改委披露调查的方式是高度战略性的,取决于公司对调查的合作态度。事件研究进一步表明,国家发改委的积极披露导致受调查的公司股票价格有显著异常的负面收益。例如,2013 年受发改委调查的一家婴儿配方奶粉制造商合生元在三天内股价的累积显著异常的负面收益达到 22%,致使其市值的损失高达反垄断罚金的 27倍。这些研究表明国家发改委的战略性的公众羞辱策略可能导致被调查企业受到严厉的市场制裁,从而阻止了企业抵抗监管者。

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The China Quarterly
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