Institutional Investor And Corporate Disclosure Practice

Corporate disclosure becomes an important topic in academic community with the rapid development of incorporated enterprise, which contributes to the transparency of the capital market as well as its efficiency. Financial reporting and disclosure are potentially important means for management to communicate firm performance and governance to outsider investors. At the same time, institutional investors become more and more powerful in the world. Therefore, the study on the two fields thoroughly has great theoretical and practical significance.This paper investigates the relationship of the institutional ownership with properties of corporate disclosure practice, providing a framework for analyzing managers' reporting and disclosure decisions in a capital markets setting, and identify key research questions. We review current empirical research on disclosure regulation, information intermediaries, and the determinants and economic consequences of corporate disclosure The first section expatiated on the research background and gave a theoretical explanation about the causes of the effect as well as the mechanism of the effect. The second section set up Ordered-Probit model to explain the property of the effects. Out finding indicate that higher disclosure rankings are directly associated with more institutional ownership, whereas the concentrated institutional ownership is negatively associated with disclosure practice. Besides, we employed the Factor-Cluster analysis method to categorize institutional investors, and found significant differences in the sensitivity of institutional investor to corporate disclosure practice. In the end, we put forward some advice to strengthen corporate governance...