Empirical Research On The Economic Consequences Of The Information Transparency Of Listed Companies In China

One juncture of economic theory and modern accounting theory is that more transparency disclosure can reduce information asymmetric, decrease transaction costs and improve market efficiency, which leads to resource reallocation and economic growth. Since last century 90's, more and more foreign researchers began to regard corporate transparency as an independent topic, examined all kinds of economic consequences of transparency. Now in China, after more than ten years' development, we have established fundmental institution system based on disclosure in capital market, but how is the listed company's disclosure, and whether transparency influenced investors and other participants of capital markets the same as in developed country, remains unanswered, that is what my paper tend to focus on.My study started from the definition of transparency, introduced all kinds of transparency measurements in use and analyzed its applicability in China; then concluded that the disclosure score declared by Shenzhen Stock Exchange is the most suitable measurement for our listed company's transparency. Then, standing on the information users' point, I used disclosure score declared by Shenzhen Stock Exchange as transparency measurement, examined how transparency influenced investors (including public investors and institutional investors), information intermedia (represented by financial analysts) and corporate managements themselves through linear regression.Finally, I find that the higher transparency the company disclosures, the more relevant between its earnings and returns, fund will keep on buying and holding more stock, the percentage of fund's stock share will simultaneous become higher, then more and more funds will be attracted to follow. If listed company disclosed more transparent information, financial analysts will rely less on historical accounting numbers, the accuracy of earnings forecast will improve, and the divergence between analysts' forecast will also decrease. Besides that, higher transparency can lead to lower cost of equity either, which means corporate managements themselves will have the same strong motivation as others to improve its transparency.My paper summarized the economic consequences of transparency from all kinds of information users' aspects, and my conclusion proved transparency is one of the most useful and valuable information to all kinds of information users and capital markets, which provides preliminary evidence for the necessary of supervision.