The effectiveness of sanctions on disclosure regulation: Australian evidence

Xiaomeng Charlene Chen; Ka Wai Choi; Sue Wright; Hai Wu

doi:10.1111/acfi.13073

The effectiveness of sanctions on disclosure regulation: Australian evidence

Xiaomeng Charlene Chen, Ka Wai Choi, Sue Wright, Hai Wu

Department of Accounting and Corporate Governance

Research output: Contribution to journal › Article › peer-review

1 Citation (Scopus)

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Abstract

We investigate the deterrent effects of securities law enforcement sanctions with different levels of severity. Our setting is Australia's Continuous Disclosure Regulation, which features a range of sanctions from light through to more punitive. We find that after civil and administrative sanctions are imposed on a firm, market liquidity of industry-peer firms significantly improves relative to non-industry-peers. Our results are robust to alternative measures, tests and models. The findings suggest that less costly and lighter sanctions are useful enforcement tools, providing important policy implications for securities regulators on the selection of sanctions to enforce disclosure regulation.

Original language	English
Pages (from-to)	3841-3872
Number of pages	32
Journal	Accounting & Finance
Volume	63
Issue number	4
Early online date	1 Mar 2023
DOIs	https://doi.org/10.1111/acfi.13073
Publication status	Published - Dec 2023

Bibliographical note

© 2023 The Authors. Accounting & Finance published by John Wiley & Sons Australia, Ltd on behalf of Accounting and Finance Association of Australia and New Zealand. Version archived for private and non-commercial use with the permission of the author/s and according to publisher conditions. For further rights please contact the publisher.

Keywords

deterrent effects
disclosure regulation
enforcement actions
market liquidity
responsive enforcement strategy
sanctions

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10.1111/acfi.13073Licence: CC BY-NC-ND

Publisher version (open access)Final published version, 308 KBLicence: CC BY-NC-ND

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The effectiveness of sanctions on disclosure regulation: Australian evidence

Abstract

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