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As mandatory social responsibility disclosure frameworks risk homogenizing corporate reporting, the informational value of conventional disclosures can become diluted, prompting a search for more credible disclosure strategies. This paper centers on "quiet giving"—a phenomenon peculiar to the Chinese capital market wherein firms make substantive philanthropic contributions yet elect not to disclose them in their social responsibility reports—to investigate whether, in an environment of increasingly strategic disclosure, non-disclosure itself can emerge as a potent informative mechanism, thereby influencing capital market pricing efficiency. Drawing upon data from Chinese A-share listed companies spanning 2007 to 2022, the study reveals that firms practicing quiet giving exhibit significantly lower stock price synchronicity, suggesting that their stock prices incorporate a greater degree of firm-specific information. Our mechanisms include curtailing information manipulation, incentivizing proactive investigative journalism, and compelling financial analysts to undertake more profound research. This effect is more pronounced in contexts characterized by intense industry competition, low corporate information transparency, and the presence of a Chief Executive Officer with a background in marketing. Subsequent analysis demonstrates that the reduction in stock price synchronicity attributable to quiet giving is concomitant with a diminished risk of stock price crashes and an enhancement of creditworthiness, thereby confirming that this phenomenon fosters greater informational efficiency rather than introducing market noise. This research elucidates the unique informational mechanism of "informative silence", offering novel theoretical perspectives for comprehending the determinants of stock price synchronicity and for optimizing the informational ecosystem of capital markets.
Quan et al. (Wed,) studied this question.