Determinants of disclosures of A-, B- and H-share companies

Purpose - This study attempts to examine the issues relating to corporate financial reporting of Chinese listed companies under specified institutional settings as companies with different share-categories are required to prepare annual reports under various General Accepted Accounting Principles (GAAP). Design/methodology/approach - This study selects Chinese companies that issue negotiable shares to examine whether corporate disclosure patterns are different under various institutional settings. Negotiable shares can be traded on stock exchanges and are divided into A-, B-and H-shares. The extent of corporate disclosure is obtained from the content analysis of annual reports for 191 sampled Chinese listed companies with various share categories. The association are hypothesized and tested between the level of corporate disclosure and the following corporate determinants: company size, profitability, auditor, leverage, industry and ownership structure. Findings - The extensive regulations and different standards influence on disclosures of companies with foreign investment participation and overseas listing status. By reconciliation of their annual reports according to the IFRSs or the GAAP of the listing country, these companies increased information disclosure voluntarily in order to enhance their reputation and credibility. Some corporate factors, such as company size, profitability and the size of auditor, have influenced the level of corporate disclosure in annual reports of domestic and foreign share-based companies. Ownership structure has positive impact on the level of disclosure for companies with domestic investors. Originality/value - This study advances knowledge of the influence that legislative circumstances and ownership structures can have on disclosure decisions made by management in their annual reports. This information is of high interest to domestic and foreign investors and regulators in understanding of financial reporting in Chinese listed companies.