FINANCIAL RESTatements have the largest impact on Chinese and Foreign Listings The impact of foreign financial restatements differs significantly those for U.S. companies. Average abnormal returns to financial restatements are -7.5% for foreign companies compared to -4.7% for U.S. companies. The impact of restatements on Chinese companies is even more pronounced. Their average abnormal returns are -9.4%. This is due in no small part to Luckin Coffee, which had abnormal returns of -92% following their restatement. The continuing disparity in abnormal returns between U.S. companies and foreign companies may indicate a confidence deficit. It appears that investor confidence is more easily shaken by a foreign restatement than by a domestic one. This seems to be particularly true of Chinese companies, a situation that has been greatly exasperated by The Luckin Effect. This confidence deficit help explain why foreign companies—especially Chinese companies—are more appetizing targets for short sellers.