A Study On Determinants Of Corporate Transparency: Evidence From Chinese Listed Companies

In capital market, the phenomenon of low corporate transparency is generally existing, in recentyears, both at home and abroad, a series of information disclosure violations damage theinvestors’interests, harm their confidence, raise market supervision costs and financing costs of thecompanies, distort market transaction behaviors, seriously hinder the development of market.Therefore, the research related to corporate transparency of listed companies has profoundsifnificance to Chinese capital market.The study of corporate transparency is getting more and more attention from public for its greatimportance for the capital market. Combined with companies’ information supplying chain andinformation transformation process, this paper analyzes the concepts of transparency. Based on signaltransfer theory, the principal-agent theory and effective capital market hypothesis, this paper discussesthe reasons that may lower the corporate transparency and the meaning of improving companies’corporate transparency. And also, this paper evaluates the current domestic and international mainmeasure methods of transparency, introduces the corporate transparency in our country, and analyzesthe negative influence of low transparency. On this basis, this paper establishes an analyticalframework, collected2103companies listed in Shenzhen exchanges motherboard from2006to2010as research samples. Descriptive statistics and correlation analysis of variables were used in this paper.Through Mann-Whitney U rank sum test, Multinomial Logistic regression models and BinaryLogistic regression models respectively, this paper digs out the main factors determining the corporatetransparency of Chinese companies. These researches provide scientific empirical evidence forconstructing information disclosure policy for Chinese listed companies and regulating domesticcapital market.In this paper, the level of corporate transparency published on the website of Shenzhen StockExchange is used to evaluate listed companies’ information transparency. The study found that theoverall level of Chinese companies’ information transparency is not high. The number of companieson the level of “good” and “excellent” is growing, and companies on the level “qualified” and“unqualified” are gradually reduced. With the regulatory system of norms and standards improve, thelevel of transparency of listed companies has been greatly improved, and the transparency of someindustry including mining, transportation and warehousing industry are in the forefront of industries.Researches also find that return on assets have a significant positive impact on corporate transparency;asset-liability ratio and corporate transparency shows a significant negative correlation; inventory and receivables over total assets of the company have a negative impact on transparency, but notsignificant; and revenue growth rate has little effect on corporate transparency. As to the indicators ofcorporate governance characteristics, ownership concentration and corporate transparency haveunsignificant positive correlation, transparency in State-owned listed companies is higher than thenon-State-owned listed company, and ownership balance degree has no significant effect on corporatetransparency, the same as the proportion of independent directors, general manager, president two hatsin one can reduce the independence of the Board, hindering the increase of transparency of listedcompanies. As to the indicators of corporate characteristics and environment, the greater the assets,the more transparent the companies are. Competitive industries tend to lower the level of transparency,and the effects of market-oriented index and age are not evident.