The effect of the promotion of private education on the firms' values in education industry: Evidence from China

The rapid development of private education has aroused great concerns for the vicious competition and the brutal growth especially in the compulsory education stage. Using the event study method, this paper quantifies the immediate effect of the "Private Education" policy on the education industry and other potential effects. Specifically, we find that: (1) Compared with the regulatory policy on private education institutions in 2019, the "Private Education" policy imposes a significant negative impact on the education industry. (2) The effect is more pronounced among the companies holding after-school tutoring business. (3) The investors may expect the effect on the transformation to software and information technology industry in advance.