Abstract Book of the 9th World Conference on Social Sciences
Year: 2025
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Research on The Impact of Common Institutional Ownership on The Quality of Corporate Information Disclosure
Dongfang Qiu, Mengting Yao, Shangqing Yang
ABSTRACT:
With the gradual emergence of institutional investors in China’s capital market, common institutional ownership as a kind of informal external governance mechanism has been widely concerned, common institutional ownership makes the interconnection between enterprises increasingly close, and its specific impact in enterprise management is worth investigating.
A two-way fixed effects model is constructed to empirically test the impact of common institutional ownership on corporate disclosure quality using listed companies in China’s A-share market on the Shenzhen Stock Exchange from 2013 to 2022 as the research sample.On the basis of the main effects regression results, based on the supervisory constraint effect and synergistic governance effect of common institutional ownership, the mechanism of agency conflict and executive compensation in the role between common institutional ownership and corporate disclosure quality is investigated. At the same time, in the heterogeneity analysis, the differential effects of common institutional ownership on corporate disclosure quality are analyzed under different levels of macroeconomic development, quality of internal control, degree of financing constraints and degree of nationalization.
The results of the study show that (1) common institutional ownership can significantly improve the quality of corporate disclosure; (2) common institutional ownership improves the quality of corporate disclosure by mitigating the agency conflict that exists in the firm and increasing the level of executive compensation by exerting the supervisory constraints effect and the synergistic governance effect, respectively; and (3) the analysis of heterogeneity reveals that in the case of a fast level of macroeconomic development of a region, poor quality of internal control, high degree of financing constraints, and high degree of nationalization, there is no difference in the quality of corporate disclosure. constraints and a high degree of nationalization, the improvement of corporate disclosure quality by common institutional ownership is more obvious.
Keywords: Quality Of Corporate Information Disclosure, Common Institutional Ownership, Agency Conflict, Executive Compensation