Supervision of not-for-profit minority institutional shareholder and annual report readability: Evidence from a quasi-natural experiment☆

Liyi Zhu, Qian Sun, Wenyu Zhang, Jian Sun and Lidong Zheng

Journal of Contemporary Accounting and Economics, 2025, vol. 21, issue 2

Abstract: In this study, we examine the efficacy of the China Securities Investor Services Center (CSISC), an advanced minority shareholder safeguard mechanism endorsed by the China Securities Regulatory Commission (CRSC), in promoting the quality of information disclosure. By utilizing a difference-in-differences analysis on the sample of Chinese listed companies, we find that CSISC shareholding improves the readability of annual reports. Additional analyses reveals that the impact of CSISC shareholding on the readability of annual reports is more pronounced with weaker internal and external governance supervision, poorer operational performance, stronger competitive intensity and senior management without a legal background. Our study contributes to the research related to the economic consequences of the CSISC exercise at the micro-enterprise level and the determinant of annual report readability. Furthermore, our findings hold significant implications for regulatory authorities aiming to enhance the investor protection system.

Keywords: China Securities Investor Services Center; Annual Report Readability; Information Disclosure Quality; Investors Protection (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jocaae:v:21:y:2025:i:2:s1815566925000165

DOI: 10.1016/j.jcae.2025.100469

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