China’s Private Listed Companies In The Impact Of Governance On The Transparency Of Information

Private economy Originated from the reform and opening up policy.In the subsequent decades, It had gained significant development. Due to private enterprises and securities markets’continuous development, the number of private listed companies is also constantly increasing. A great many of private enterprises plan to share this huge "cake".However, owing to the defect of Chinese capital market and the low efficiency of corporate management, the minority shareholders of listed companies will possess a large number of internal information, on the contrary, other investors, especially small and medium investors will finally fail to obtain the necessary information. The result is the transparency of private information is very poor.In addition, the majority of investors are very skeptical of private enterprises and distrust, which is partly due to a series of scandals and the global financial crisis. There will be a tremendous negative impact on the future development of private listed companies. Therefore, one of the most important solutions is enhancing the transparency of information. This article is basically study from the perspective of how to improve corporate governance, the information transparency. Therefore this article is of significance in theory and practice.The author will use a combination of normative and empirical research methods. The destination of this paper is to analyze the impact on information transparency of the internal and external governance structure. As for the relation between the governance structure and the transparency of information, author plans to utilize empirical relationship. In order to research the transparency of information, the author takes advantage of the results of Shenzhen Stock Exchange. The internal quota includes:ownership structure, the proportion of independent directors and the ratio of management shareholding.The external quota includes: the number of financial analysts and the audit opinion of CPA. Control variable includes the profitability, financial leverage and company size, etc. Sample include the private companies listed on the Shenzhen Stock Exchange in 2007-2009.Excluding the financial sector and private companies and listed company whose data is not complete.The main contents of this article:The first chapter:introduction. Introduces the research background and significanceChapterⅡ:theoretical analysis.ChapterⅢ:literature Review. The main destination of this study is the impact of information transparency. At present, only few domestic studies had been gained. Additional, the definition of foreign private enterprises and the definition of private enterprises in China varied widely, therefore, this chapter is a literature review, including all listed companies in terms of domestic and foreign.ChapterⅣ, hypotheses and research design. The proposal includes hypotheses and research design in two parts. The author proposes four internal corporate governance, corporate governance assumptions and the two external assumptions. On this basis, author established two models and enhanced an empirical study of data sources, sample selection and the specific definition of dependent variable, explanatory variables and control variables.ChapterⅤ:empirical research and analyze. This part includes the overall information of listed companies on the private appraisal results and trends in the 07-09 years of described statistical analysis. Moreover, carrying out a descriptive analysis from the overall level of private external corporate governance of listed companies.Finally, the authors utilize the regression analyze the impact of information transparency on an empirical analysis.ChapterⅥ, conclusions and recommendations This section summarizes the conclusions of this study, and proposed to improve the corporate governance of private policy recommendations according to the results. Finally, the limitation of this study was illustrated.Conclusions are as following:First, private ownership concentration of listed companies was positively correlated with the transparency of information.The higher the degree of ownership concentration the higher transparency of information. Direct listing of private enterprises is more difficult.Most companies are willing to list through indirect means such as shell or backdoor listing. However, backdoor requires a lot of money and those who shell or backdoor want to hold or acquire more resources. These companies are more likely to occur earnings management and financial fraud, Therefore, the quality of information is often even worse, lack of transparency of information. Private enterprises with respect to indirect market, Private companies listed directly tend to have a more large proportion of control, higher ownership concentration and better business performance. Good corporate earnings management performance are less likely to occur, enterprises have a higher transparency of information.Second, the proportion of independent directors is associated with information transparency, but the proportion of the information had no significant effect on transparency. The reason may be the implement of independent directors of listed companies of private initiative is not very good. Independent Directors may only be used to meet the requirements of the Commission.Third, the private Union of Listed Companies was positively correlated with the transparency of information. We find that it can save the company agent, information, conversion and other costs of the four areas. Thereby it can be helpful to improve the company’s performance. In addition, many companies are controlled by parents and individuals, it can reduce the cost of the psychological contract, but also enables companies to quickly seize business opportunities and improve corporate performance.Fourth, the proportion of private ownership of listed companies and the transparency of information executives are related, but not significant. Managerial ownership can reduce agency cost, improve company performance and increase transparency.Fifth, private listed company’s audit opinions and information transparency have a significant positive correlation. To maintain the reputation and meet the requirements of the relevant regulatory authorities, the audit will generally collect sufficient and appropriate audit evidence, so those who are unqualified audit opinion issued by the audit report higher information transparency of listed companies.Sixth, the number of private listed companies and information transparency, the financial analyst was a significant positive correlation. Financial analysts, mainly analyze through the information disclosure of listed companies. Thus, the more financial analysts study, the more information can be gained.The main contribution of this paper is studying from internal and external corporate governance, respectively. Internal corporate governance includes these quotas:ownership structure, board of supervisors and executives, So this study of private governance structure of listed companies is helpful.