Does Good Corporate Governance Improve Disclosure? Evidence from China

Project: Research

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This study examines compensation disclosure and corporate governance in Chinese listed stock companies. Prior studies on corporate governance in Western economies and mature markets have found that certain corporate governance mechanisms improve the level and/or quality of disclosure. However, ritualism-based disclosure positions, in which firms routinely adhere to minimum standards, may dominate in China due to the existence of certain economic, sociological, and cultural factors. Such positions may moderate the effects of corporate governance. This study will construct a new data set that covers a large number of Chinese listed stock companies over a five-year period. Results of this research will help to find out whether various Western-style governance mechanisms (such as, the existence of audit committees and the proportion of independent directors) affect compensation disclosure in China and if they do, which governance mechanisms are the most effective to improve disclosure. Failure to find such a relation will be evidence that ritualism-based disclosure positions may be difficult to overcome in an emerging market such as China.


Project number7002150
Grant typeSRG
Effective start/end date1/04/078/10/09