Public access to in-house meeting reports and stock liquidity: evidence from China

In this study we analyze the impact of a regulatory change in disclosure on private in-house meetings on stock liquidity. In July 2012, the Shenzhen Stock Exchange (SZSE) in China required that all listed firms publish a summary report for each in-house meeting within two working days of the event. Based on a sample of 55,816 firm-day observations between 2014 and 2017, we find that the mandatory disclosure levels the playing field for all investors by revealing information previously known to sophisticated investors, resulting in decreased information asymmetry component of the bid-ask spread. Furthermore, the effect is more pronounced for firms with a greater information gap between their investors and when meeting reports are less similar to the ones released in the previous 90 days. Our findings have implication for policymakers, regulators as well as investors.