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Online Ratings and Voluntary Disclosure: Evidence from Taiwanese Hotel Industry

  • Date 2020-10-30 (Fri)
  • Time 02:30 PM
  • Venue Conference Room C103
  • Presider Professor Tzu-Ting Yang
  • Speaker Professor Fang-Chang Kuo
  • Background Professor Kuo received his Ph.D. in Economics from the University of Texas at Austin in 2019. He is currently an Assistant Professor at National Chung Cheng University. His research fields are Empirical Industrial Organization, Applied Econometrics, and Corporate Finance.
  • Abstract This paper investigates the impacts of a voluntary quality disclosure program and how it is affected by prevalent online reputation mechanisms. Theory does not have a clear prediction about how voluntary quality disclosure and reputation mechanisms interact as they are both potential solutions to asymmetric information problems. To empirically study this issue, I exploit a Star Rating Program introduced in the Taiwanese hotel industry and construct a detailed panel of hotel Star Rating statuses, financial performances, and online ratings scraped from various rating platforms. Empirical results indicate heterogeneous effects from different star levels. Moreover, the presence of online ratings decreases the effects from voluntary disclosure program.