Abstract
We examined the impact of the volume of Q&As from minority shareholders on interactive questions and answers (IQA) platforms in restraining tunneling. The findings suggest that Q&A volumes contribute to less tunneling. We find that by lowering information asymmetry and enhancing firms' internal control effectiveness, IQA platforms play a monitoring function, effectively restraining tunneling. The moderating analysis reveals that the impact of IQA platforms on restraining tunneling is more salient when a firm has (1) only small shareholdings from other large blockholders, (2) low-quality auditors, (3) low institutional investor shareholdings, (4) a large wedge of ownership and control, or (5) controlling shareholders who pledge their shares to financial institutions. Additional analysis suggests that the effectiveness of IQA platforms improves with more timely, thorough, readable, and related replies. Our results support the public policy of providing online platforms for minority shareholders to exercise their rights.
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