Corporate governance and forward-looking disclosure: Evidence from China

Sun Liu

Journal of International Accounting, Auditing and Taxation, 2015, vol. 25, issue C, 16-30

Abstract: This paper investigates the association between a range of corporate governance mechanisms and forward-looking disclosure (FLD) in a low information environment: the Chinese stock markets. It finds that the implementation of certain monitoring and control mechanisms, such as financial expertise on audit committees and independent directors on the board of directors, can improve the extent of FLD. However, the size of the supervisory board and separating the roles of the CEO and the chairman of the board of directors is of little help in explaining any improvement in FLD. In contrast, ownership structure appears to play an essential role in determining FLD policies. Indeed, listed firms with high levels of foreign ownership and fewer pyramidal layers in their ownership structure tend to disclose more forward-looking information. Of particular interest, the association between state ownership and FLD is likely to be non-linear (an inverted U-shape), and the inflection point at which the association becomes negative occurs at a state ownership over 33 percent. In summary, this study provides new evidence on the impact of corporate governance mechanisms on FLD in China's unique institutional environment.

Keywords: Corporate governance; Forward-looking disclosure; Information asymmetry; China (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1061951815000233
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jiaata:v:25:y:2015:i:c:p:16-30

DOI: 10.1016/j.intaccaudtax.2015.10.002

Access Statistics for this article

Journal of International Accounting, Auditing and Taxation is currently edited by R. Larson

More articles in Journal of International Accounting, Auditing and Taxation from Elsevier
Bibliographic data for series maintained by Catherine Liu ().