Information Asymmetry, East-West Cultural Differences, and Divergence in Investor Reactions

Seungho Lee* (Corresponding Author), Aoran Zhang, Thomas Walker, Yunfei Zhao (Corresponding Author)

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


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.
Original languageEnglish
JournalEuropean Financial Management
Issue number4
Early online date9 Aug 2022
Publication statusE-pub ahead of print - 9 Aug 2022


  • Presidential Term Limit
  • Term Limit Abolition
  • China
  • United States
  • Political Connection
  • Equity Market


Dive into the research topics of 'Information Asymmetry, East-West Cultural Differences, and Divergence in Investor Reactions'. Together they form a unique fingerprint.

Cite this