Title: Regulatory Enforcement of Public Disclosure and Connected Investors in Corporate Bond Issuance

Speaker: Zhang Ray, Associate Professor, Simon Fraser University (Canada); Ph.D. Supervisor. His research fields include corporate governance, climate reputation, securities regulation and enforcement, bank loan contracts and auditing, and executive personality assessment. He has currently published more than 10 papers in international top journals such as "Journal of Financial and Quantitative Analysis", "Review of Accounting Studies", "Management Science", "Journal of Business Ethics", "Journal of Business Finance & Accounting" and "Journal of Accounting and Public Policy". He has also received a number of external grants: SSHRC Insight Development Grant (Independent Applicant) - 74,950 (2023-2026); CPABCEF Research Grant: $10,000 (2018-2020).

Abstract: This paper explores whether and how regulatory enforcement of public disclosure affects the investment decisions of connected investors. By studying comment letters (CLs) issued by regulators in China’s bond market before bond issuance, we find that issuers are less likely to issue bonds after receiving CLs, indicating that regulators’ concerns about issuers’ public disclosure have a negative impact on bond issuance. Using proprietary datasets, we find that connected investors—financial institutions with prior business relationships with issuers—increase their bond purchases in the bond issuances of issuers that received CLs, which mitigates the negative impact of CLs on bond issuance. Further analysis shows that the motivation for connected investors to increase bond purchases includes both their private information about issuers that received CLs and the mutually beneficial relationships with these issuers.

Date & time: 4 August 2025, 15:30

Venue: B438, Zhixin Building, Central Campus, Shandong University