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Research team takes closer look at the private meetings of public firms

Professor Shantanu Dutta will be a co-investigator in a study examining the private in-house meetings of companies, funded by the National Science Foundation of China.

Background - Concerns that select groups of investors benefit from access to material, non-public information in their private meetings with firms are as old as the financial markets. The content of these gatherings isn’t disclosed, making it difficult to study questions about what types of firms hold them, who typically participates and the impact on investors’ trading decisions. But in China, researchers now have a unique window on these questions. The country moved from a system of voluntary disclosure to mandatory disclosure of private in-house meetings. As an example, firms listed on the Shenzhen Stock Exchange (SZSE) – considered the 7th largest stock exchange in the world by domestic market capitalization – are now obliged to disclose records of meetings with investors and other participants within two days of the meeting date.

Research project - A large dataset of information on private meetings will be assembled and analyzed to better understand their consequences in a country that has the second largest economy in the world but still lacks a strong legal environment. The research team includes Songlian Tang, East China University of Science and Technology, Robert Bowen and PengCheng Zhu, University of San Diego, who have already authored two working papers on the topic. Their article “Inside the ‘Black Box’ of Private In-House Meetings: Implications for Fair Disclosure and Insider Trading Regulations” received an Emerald best paper award in July 2016.