TILEC Seminar: Angela Zhang (KCL)
Strategic Public Shaming, Evidence from Chinese Antitrust
10:45-11:45, M 1003
Dr Angela Zhang is a Senior Lecturer in competition law and trade (Associate Professor equivalent) at King’s. Her research focuses on applying economic analysis to the study of transnational legal issues. Specifically, she seeks to explore how institutional factors drive the legal outcomes affecting global businesses. She is currently working on two empirical projects: one on the clash between antitrust and China and the other on the behaviour of EU judges. Before joining academia, Angela practiced bankruptcy law at Debevoise & Plimpton in New York and antitrust law at Cleary Gottlieb Steen & Hamilton in Brussels. She also has practice experience in Beijing, Hong Kong and London. Angela received her LLB from Peking University in 2004 and her JSD (2011), JD (2008) and LLM (2006) from the University of Chicago Law School.
This article examines strategic public shaming, a novel form of regulatory tactic employed by the National Development and Reform Commission (NDRC) during its enforcement of the Anti-Monopoly Law. Based on analysis of media coverage and interview findings, the study finds that the way the NDRC disclosed its investigation is highly strategic depending on the firm’s co-operative attitude toward the investigation. Event studies further show that the NDRC’s proactive disclosure resulted in significantly negative abnormal returns of the stock prices of firms subject to the disclosure. For instance, Biostime, an infant-formula manufacturer investigated in 2013, experienced -22% cumulative abnormal return in a three-day event window, resulting in a loss of market capitalization that is 27 times the ultimate antitrust fine it received. The NDRC’s strategic public shaming could therefore result in severe market sanction that deters firms from defying the agency.