ABSTRACT Data have become increasingly important in almost all aspects of society, including government, business, finance, and education. This study examines stock market reactions to the publication of formal regulations on the accounting treatment of data assets, which, among other things, specifies the accounting treatment related to corporate data resources and boosts the disclosure of related accounting information. We document that firms with higher data asset potential receive more positive market reactions to the regulations than those with lower data asset potential. Heterogeneity analyses suggest that the positive market reactions are concentrated in firms with technological attribute, higher technological factor intensity, and stronger market position. In addition, we observe that stronger external monitoring, higher stock liquidity, and better information disclosure amplify the positive market reactions. Overall, our findings provide systematic evidence of positive market reactions following data assets regulations and shed light on relevant policy‐making and regulatory processes, which may be extrapolated to other emerging countries.
Huang et al. (Sun,) studied this question.
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