Non-financial information uncertainty, firm growth, and market value during crisis: Evidence from China

IF 4.8 2区经济学 Q1 BUSINESS, FINANCE

Pacific-Basin Finance Journal Pub Date : 2025-03-13 DOI:10.1016/j.pacfin.2025.102748

Pengzhi Kong , Louis T.W. Cheng , Lulu Pan , Jianfu Shen , Qing Yu

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Abstract

This study investigates the impact of non-financial information uncertainty on market valuation during times of crisis. Using a sample of the largest listed firms in China and measuring non-financial information uncertainty through governance rating divergence, we find that firms with higher non-financial information uncertainty experienced a more significant and negative market reaction during the COVID-19 crisis compared to firms with low non-financial information uncertainty. Although stock prices of firms with robust growth opportunities are more resilient to the pandemic, non-financial information uncertainty mitigates the positive effect of firm growth on stock market reactions to the COVID-19 outbreak, indicating that corporate resilience to crisis is compromised by non-financial information uncertainty. A further analysis suggests that dual listing in mainland China and Hong Kong stock markets mitigates the negative effect of non-financial information uncertainty on stock market valuation, attributable to the higher quality of non-financial disclosure by these firms. Overall, this study sheds light on the unique role of non-financial information uncertainty in stock market valuation and stock price resilience during crises.

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危机期间的非财务信息不确定性、企业成长和市场价值：来自中国的证据

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来源期刊

Pacific-Basin Finance Journal BUSINESS, FINANCE-

CiteScore

6.80

自引率

6.50%

发文量

157

期刊介绍： The Pacific-Basin Finance Journal is aimed at providing a specialized forum for the publication of academic research on capital markets of the Asia-Pacific countries. Primary emphasis will be placed on the highest quality empirical and theoretical research in the following areas: • Market Micro-structure; • Investment and Portfolio Management; • Theories of Market Equilibrium; • Valuation of Financial and Real Assets; • Behavior of Asset Prices in Financial Sectors; • Normative Theory of Financial Management; • Capital Markets of Development; • Market Mechanisms.