| Corporate site visits are a unique type of private interaction between investors and firms,which provide investors opportunities to observe the operation activities and production facilities and to conduct more in-depth discussions with midlevel managers and other employees.In the U.S.and Europe,firms either do not maintain archival records of site visits or prohibit the distribution of such information.However,since July 2012,Shenzhen Stock Exchange has required firms to disclose summary reports on site visits.This disclosure requirement provides a unique setting for analyzing the information flows of corporate site visits.This paper investigates the information transmission of corporate site visits and observes whether they can provide firm-specific information based on a hand-collected dataset of corporate site visits of Shenzhen Stock Exchange in the year between 2013 and 2016.The main contributions are as follows.First,by using Logit model and panel data regression,this paper explores that the probability and frequency of corporate site visits are positively related to information asymmetry level of the company.The higher of the information opacity level and bid-ask spread and the lower of the information disclosure quality of a company,the higher of the probability and frequency of site visits.Second,this paper documents significant market reactions around both corporate site visits and disclosure of their summary reports by using event study methods,and those reactions around disclosure of site visits are stronger for firms with higher information asymmetry.Finally,the results show that market reactions around the latest disclosure of site visits and forthcoming disclosure of periodic financial reports are positively associated,and there is a negative correlation between the intensity of market reactions around them,which means market reactions of part of the information contained in periodic financial reports have been released in advance through the disclosure of site visits.Further,this paper finds that the influences of information asymmetry level on site visits vary with different kinds of investors.The conclusions of this paper lie in that the information environment of a company will not only influence the probability and frequency of corporate site visits,but also the market reactions around disclosure of them.Moreover,both the occurrence and the disclosure of corporate site visits will provide firm-specific information to the market,and the disclosure of site visits will release part of the information contained in periodic financial reports in advance. |
