An Empirical Study On Effect Of Corporate Governance Upon Voluntary Disclosure Of Listed Companies Of China

Voluntary disclosure can be defined as disclosure providing the public with related information in the excess of requirements. Voluntary disclosure is the supplement and extension of mandatory disclosure, capable of improving the transparency of companies, eliminating the information asymmetry between the internal and the external, protecting investors and interest parties, and meaningful to investors, interest parties, security market as well as listed companies. However, listed companies in China only began to disclose information voluntarily very recently which is of low quality. Hence, it becomes a quite practical problem how to improve voluntary disclosure of listed companies in China. And the critical factor influencing the voluntary disclosure, besides the external economic environment, is corporate governance. So the paper examines the influence of corporate governance on voluntary disclosure empirically and theoretically in order to improve the voluntary disclosure and information quality of listed companies in China by making some suggestions about corporate governance and information disclosure.The paper is composed of mainly 5 sections. Firstly, the paper brings forward the background and significance of the subject. Secondly, I sum up, compare and analyze studies about voluntary disclosure by scholars abroad and at home which can be considered as the foundation of my research. Thirdly, the paper states definition of voluntary disclosure and corporate governance, and analyzes the influence of corporate governance on voluntary disclosure theoretically. There is complementary relationship between corporate governance and voluntary disclosure, which means more perfect the corporate governance is, the better voluntary disclosure will be. Furthermore, the paper makes an empirical study on influence to voluntary disclosure by corporate governance. Based on theoretical analysis, the attributes of ownership structure and features of the board of directors are set up, including ownership concentration, controlling ownership identity, the proportion of institutional investor ownership, the proportion of shareholding supervisors to the total number of supervisors on the board, CEO duality, the proportion of independent directors to the total number of directors on the board and participation of independent directors. Meanwhile, 3 controlling variables are set up, including company size, profitability and the market. The study is based on a sample of 156 listed companies in machinery industry which only have A-shares on either Shanghai or Shenzhen Stock Exchange. Then a linear multiple regression equation is established to test the conjecture. The result indicates that controlling ownership identity, participation of independent directors relate notably to voluntary disclosure positively, and the proportion of shareholding supervisors to the total number of supervisors on the board relate weakly to voluntary disclosure positively. The correlation between other independent variables and dependent variable is insignificant. Finally, based on theoretical and empirical research, some advises are provided mainly including the improvement of ownership structure, board of directors, board of supervisors and disclosure systems.