Empirical Study Of Managerial Power Influence On The Quality Of Information Disclosure

The information disclosure of listed companies can be viewed as one of the information transmission mechanisms in the capital market. It can transmit effective company information to help the investors, creditors and other stakeholders to make sound investment decisions. Therefore, the quality of information disclosure plays an important role in promoting the effectiveness of capital market and protecting investors’ interests in China.However, the listed company’s management plays a very critical role in the process of disclosing information. It is a common practice that the information disclosure through management to the outside world. The listed company’s management is more likely to use their power to influence disclosing information, thus affecting the investment decisions of information users. Therefore, the study of managerial power how to impact the quality of information disclosure has an important significance both in promoting the healthy development of the securities market and protecting the investors’ interests at the same time.First of all, the current literature about managerial power and the quality of information disclosure was reviewed. Secondly, the theory of management rights,principal-agent, asymmetric information and the related concepts of disclosure quality were illustrated. Managerial power were divided into four kinds of rights that includes ownership right, structural right, reputation right and expert right. Then assumptions were put forward about the relation between four rights and information disclosure quality. A two element logistic regression model and data of 1080 listing corporations form 2012 to2014 was used to verify the hypothesis.The empirical results showed that under the current situation in China, improving management’s ownership rights can increase the quality of listed companies’ information disclosure. Reducing management’s structural rights can increase its quality. Increasing management’s reputation right can enhance its quality. And increasing management’sexpert rights can increase its quality.Based on the empirical results, suggestion are given that government regulators should optimize the listed company managerial power, strengthen and improve the listed company’s information disclosure system according to the characteristics of Chinese enterprises. It also necessary to make the quality of listed companies’ information disclosure better by the measures of internal governance mechanisms.