@article{3b913477f02141cfa802d5667e7e9ecb,
title = "Information Asymmetry, East-West Cultural Differences, and Divergence in Investor Reactions",
abstract = "This paper investigates the divergence in investor behavior between the U.S. and China following the abolition of the Chinese presidential term limit in 2018, which may, in part, have reflected the heterogeneous opinions expressed in public online media regarding this event. Compared with Chinese investors, the sentiment among U.S. investors was considerably more pessimistic. Accordingly, we find that Chinese companies listed in the U.S. significantly underperformed relative to a sample of propensity score matched firms listed in China. Additionally, we find that the political connectedness of firms to the Chinese government strongly influenced the stock prices of U.S-listed Chinese firms.",
keywords = "Presidential Term Limit, Term Limit Abolition, China, United States, Political Connection, Equity Market",
author = "Seungho Lee and Aoran Zhang and Thomas Walker and Yunfei Zhao",
note = "Funding Information: We are grateful to the editor, Dr. John A. Doukas, and an anonymous referee for their valuable comments. In addition, we thank Sanjay Banerji, Denis Schweizer, Frederick Davis, Gady Jacoby, Hamed Khadivar, Lorne Switzer, Maher Kooli, as well as participants of the 32nd Australasia Finance and Banking Conference (Sydney, Australia) and the 2020 Cross Country Perspectives in Finance (CCPF) Conference for helpful comments and suggestions. We are grateful to Stephen and Naomi Miller for helpful comments and suggestions and to Kalima Vico for excellent research assistance. This study was funded by Concordia's Office of the Vice President, Research & Graduate Studies (OVPRGS). A previous version of this paper was entitled {\textquoteleft}Information Asymmetry, Cultural Difference, and Divergence in Investor Reactions: Empirical Evidence from the Chinese and U.S. Stock Markets{\textquoteright}. Consistent with EFM guidelines, authors are listed in alphabetical order. ",
year = "2022",
month = aug,
day = "9",
doi = "10.1111/eufm.12388",
language = "English",
volume = "29",
journal = "European Financial Management",
issn = "1354-7798",
publisher = "Wiley-Blackwell",
number = "4",
}