Using the China Cybersecurity Law as an exogenous shock, we study the effect of real-name verification on the information quality of user-generated content on social media. Using a difference-in-differences research design that exploits the differential timing of implementation of the real-name verification policy by two most popular investment-related social media platforms in China, we find that the information quality of the treatment platform significantly improved after the adoption of the real-name verification policy over that of the control platform, consistent with real-name verification having an overall disciplining effect that enhances the platform’s information quality. Further analyses of various user groups and firm types within the platform show that the disciplining effect comes from users who stay on after the new policy. Their improvement is concentrated among the highly active users who became more prudent in posting after the policy. We do not find evidence of a self-censoring effect that lowers information quality within other user groups and firm types.
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