Hello, is anybody there? Corporate accessibility for outside shareholders as a signal of agency problems

  • Michael Firth
  • Chen LinEmail author
  • Sonia Man-lai Wong
  • Xiaofeng Zhao


In this paper, we develop a corporate accessibility measure for publicly listed firms in China based on their responses to outside market participants’ attempts to communicate with them (via telephone, e-mail, and online discussion forum), and examine whether the provision of corporate accessibility signals the incidence of agency problems. We find robust evidence that non-accessible firms are associated with more agency problems, manifested in greater tunneling of corporate resources through inter-corporate loans and related-party transactions, greater consumption of managerial slack, more earnings management, and a higher probability of committing corporate fraud. We also find that non-accessible firms are more likely to conduct value-destroying acquisitions than accessible firms. Furthermore, we find that non-accessible firms underperform accessible firms in both firm valuation and operating performance. Overall, our results suggest that a firm’s decision to provide corporate accessibility is a value-relevant signal for informing investors of the severity of agency problems in publicly listed firms.


Corporate accessibility Agency problems Direct communications Signaling 

JEL classification

G30 D82 M41 



We thank Patricia Dechow (the editor) and two anonymous referees for their constructive feedback and valuable comments. We also appreciate the helpful comments from K. Philip Wang, Ignacio Requejo, Cong Wang, Yuanyuan Zhang, Jingyuan Li, and Jin Gao and the seminar participants at Zhongnan University of Economics and Law, the Seventh China Finance and Investment Forum, and EFMA. We also thank Zhengjia Guo for her excellent research assistance. Wong thanks the Government of the Hong Kong Special Administrative Region of PRC for funding support (GRF LU391113). Lin acknowledges the financial supports from the National Natural Science Foundation of China (No. 71790601 and 71728009).


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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  • Michael Firth
    • 2
  • Chen Lin
    • 1
    Email author
  • Sonia Man-lai Wong
    • 2
  • Xiaofeng Zhao
    • 2
  1. 1.University of Hong KongPok Fu LamHong Kong
  2. 2.Lingnan UniversityTuen MunHong Kong

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