Management's Overseas Background And Information Disclosure Quality

Information,as an important resource in the capital market,affects the efficiency of market disposition and the decisions of investors.In the capital market,information comes from a variety of sources.Among them,information disclosure by companies is a very important channel for investors and regulatory authorities to get know the basic features,business,news and dynamics of listed companies,and it plays a crucial role in the information source of the capital market.The newly revised “Securities Law” in this year also focused on the information disclosure in particular.It is worth noting that it has set up a special section to stipulate the information disclosure system,which made higher standards for company's information disclosure's content and quality.Information disclosure quality,is a comprehensive indicator to measure the content and the behavior of the company's information disclosure.Improving the quality of information disclosure is conducive to reducing information asymmetry,financing constraints and financing costs,and it can also improve corporate governance.According to the prior studies,we found that corporate governance,firm characteristics,management characteristics,external governance and market environment and other factors will have influence on information disclosure quality.As the main obligor of information disclosure,the company's management plays an important role in information disclosure decisions and information disclosure's content.Based on the upper echelon theory,the psychological characteristics of management,such as cognition and values,will have some impact on the information disclosure decision.With the rapid development of China's society,economy and a series of preferential policies,more and more overseas talents choose to return to China for development and play an important role in corporate governance gradually.According to the imprinting theory,influenced by foreign cultures,laws and institutions,overseas experience is likely to leave a “cognitive imprint” and a “capacity imprint” on individuals,which will have an important influence on their decision-making behavior.At the same time,the reputation theory tells us that,as the professional managers,managers will serve this kind of labor market for a long time,and the reputation mechanism has obvious restraint and incentive effect on them.What's more,management with overseas backgrounds paid more costs for the oversea experience,so they may cherish their reputation and treat their decisions and actions more responsibly and more seriously.The prior researches about management's oversea background mainly focused on corporate performance,innovation,social responsibility,capital structure,corporate strategy and others.So there is still a certain research gap about the impact of management's oversea background on the information disclosure quality.Based on the upper echelon theory,imprinting theory and reputation theory,this study conducts empirical research on Chinese public companies from 2014-2018,and examined the differernt influence of management' overseas experience's sources,content and positions.As a result,we reaches the following conclusions.(1)Management with oversea background will significantly improves information disclosure quality,Which means that if there are executives with overseas background in the executive team,it will have a positive impact on the company's information disclosure quality.(2)Compared with oversea work experience,oversea study experience has a more obvious effect on improving the quality of information disclosure.(3)The improvement is more significant if the oversea experiences are from countries or areas practicing common law rather than civil law.(4)The oversea background of key managers(the chairman,CEO,CFO and secretary of the board)does improve the information disclosure quality strongly than other managers.Improving the quality of information disclosure is not only conducive to creating a transparent securities market,protecting the rights and interests of investors and promoting the healthy development of the capital market,but also can effectively alleviate the information asymmetry between companies and investors,creditors,shareholders and managers,reducing financing costs and improving corporate governance.This paper explores the influence of management's oversea background on the information disclosure quality both in theory and empirical,which provides a new perspective for the study of information disclosure quality and the study of management's oversea background.In addition,this paper also enrich the related research on management's oversea background.Furthermore,this paper is helpful to understand the basic situation and the role of management with overseas background and this paper provides some suggestions for improving the quality of information disclosure,which has great significance both in theory and in practice.(1)The government should intensify the introduction of overseas talents,and clarify the corresponding threshold to ensure the quality of overseas talents at the same time.(2)Enterprises should improve the internationalization level of the senior management team,further improve the cognitive level and management ability of senior executives,and constantly improve the quality of information disclosure.(3)Enterprises should pay attention to the diversity and unity within the senior management team,so that these talents with overseas backgrounds can integrate into the management team better.