Impact of Corporate Governance on Voluntary Disclosure in Chinese Listed Companies

This study examines the impact of corporate governance on voluntary disclosure in 100 non-financial Chinese listed firms for the period 2003-2005. There are two main findings. (1) Firms with high Managerial ownership have high level of voluntary disclosure. If a firm has a high managerial ownership, managers are much more concerned about the benefit of shareholders and stock options will have incentives to contribute the firm. Thus, a capital structure with high managerial ownership decreases agency costs and increases the voluntary disclosure. (2) the significant correlation is identified ownership concentration with the voluntary disclosure. This is because the largest shareholders have a strong interest in firm performance and therefore a high ability to increase voluntary disclosure. Our empirical results further illustrate that big firms have inclination of voluntary disclosure through stock market and the exogenous mechanism between them is exposed.