Research On The Relationship Between The Voluntary Information Disclosure And The Agency Cost Of The Commercial Bank Of China

The information disclosure of the listed commercial bank can be divided into themandatory disclosure and the voluntary one.Different from the mandatory disclosurewhich is driven by the system,the voluntary disclosure belongs to the motivationincentive one. The quality and quantity of voluntary disclosure reflects thecomprehensive consideration of the managers of the listed commercial banks on thecosts and benefits.As the financial intermediary, products and capital structure of listed commercialbanks is largely different from the listed corporation of other industry. Due to thecharacteristics of the banking industry with high debt ratios and robustness ofbusiness requirements, the provisions of the regulatory authorities of its informationdisclosure is also different from other industries.In the meantime,because of theparticular and professional characteristics of the operation of the commercial bank,the provider of funds is difficult to understand the channel which the banks use theirfunds.As a result,the information asymmetry problem of the commercial bank is moreserious than any other industry, and the information disclosure is particularlysignificant.As a important way the commercial banks show their operating situationand strength,the voluntary disclosure has important reference significance.Researchon the relationship between the disclosure level of the commercial bank and theagency cost,is not only conducive to propose measures to improve the governance ofcommercial banks,but also can make policy recommendations in favor of bankingsupervision.In this paper, according to the investigation of the2009-2011Annual Report ofChina’s14listed commercial banks,based on the relevant law of the informationdisclosure and the foreign and domestic research,we design the voluntary informationdisclosure indicator system,which includes the environmental and strategicinformation,the non-financial information, the management discussion andanalysis,and the forecasting information,then takes advantage of the improveddichotomy to evaluate the dicators and add up the score.In order to evaluate thevoluntary information disclosure level,entropy model of the information theory isintroduced to calculate the objective weight of each indicator,thus gets thecomprehensive value of the voluntary information disclosure of the commercialbank.based on the foreign and domestic research and the unique characteristics of the commercial bank sectors, this paper selects three alternative variables to measure theagency cost of the listed commercial bank.Through controlling the basic characteristicvariables of the commercial bank,such as the size,performance and the nature of thebank, the empirical analysis is made to find the relationship between the level ofvoluntary disclosure of listed commercial banks and agency costs.The main conclusion is as follows:(1)There are differences between the voluntary information disclosure level ofthe listed commercial bank,the importance of the indicators in the evaluating systemis ordered as follows:The forecasting information,the management discussion andanalysis, the non-financial information,and the environmental and strategicinformation. From the nature of the bank’s point of view, the comprehensiveevaluation value of the information disclosure level ranked in the top six banks, onlyone state-owned bank,the others are all joint-equity commercial bank,However,thepolarization of voluntary information disclosure level between different joint-stockbanks is obvious, the top three and the last two are all joint-stock banks. It’s visiblethat the emphasis on voluntary information disclosure is much different between thejoint-stock banks,(2) Through controlling the basic characteristic variables of the commercialbank,such as the size,performance and the nature of the bank, the empirical analysis ismade to find the relationship between the level of voluntary disclosure of listedcommercial banks and agency costs.The result shows the indicator of thenon-performing loans which reveals the efficiency of the funds and the indicator ofthe manager share ratio which reveals the seperation of the ownership and themanagement is significant to the disclosure level of the listed commercial bank.