Information Disclosure, Transparency And Corporate Performance

To some extent, stock market is an information exchange market, one of the essential problems of stock market research is whether the stock price can react to new information accurately and timely. As the source of information, disclosure is the institutional foundation of the market construction and development. For the emerging markets like China, due to the lack of regulatory experience, information disclosure problem is of the utmost importance. This paper tries to explore the current disclosure level of China's listed companies and the relationship between transparency and corporate performance.The paper consists of six parts: the first part is introduction, states the purpose of the research, methodology and concepts definition; the second part introduced both home and abroad research documents, addressed the incentives of both mandatory and voluntary disclosure, also this part gives a concept analysis of how disclosure can affect corporate performance; in the third part, we develop an information disclosure index consists of not only voluntary but also mandatory disclosure itmes, the empirical results from the application of this index show that China's listed company disclosure level improves year by year, but there are still some inadequacy in some aspects; the fourth part examines the factors affects corporate disclosure, we find that the size and operation status are the main factors affect disclosure levels, in addition, an appropriate shareholder structure attributes to good information quality and transparency, but the board governance mechanism does not play an ideal role in the improvement of corporate transparency as we expected; the fifth part aims to drive the empirical evidence of how the disclosure will affect corporate performance, the results show that the more transparent the company is, the higher Tobin's Q and ROE it has, it means that higher information quality helps the improvement of corporate performance; the last part is conclusions and policy suggestions.