Ownership Structure and Financial Reporting Transparency: The Empirical Evidence from Construction and Real Estate Listed Companies in China

摘要

The financial reporting transparency of construction and real estate listed companies in China is very low. In order to determine the cause of it, and improve the quality of financial reports of construction and real estate listed companies, we investigate the impact of ownership structure on financial reporting transparency of construction and real estate listed companies in China. Based on a total of 156 samples obtained from listed firm of construction companies and real estate companies over the three-year period between 2004 and 2006, We comprehensively use feedback value of financial reports, financial reporting neutrality, faithful representation and the timeliness of bad news to measure financial reporting transparency. After that, we examine the effects of ownership structure on financial reporting transparency of listed companies. The empirical results indicate that the relation between cash flow rights held by the ultimate controlling shareholder and financial reporting transparency undergoes a change from descrease firstly to an increase then and shows a ‘U-shaped' curve. We also find that the check-and-balance ability of the second to the fifth largest shareholders and creditors' constrains can positively affect financial reporting transparency. For state-owned listed company, its financial reporting transparency is lower. Large listed companies have lower financial reporting transparency. The relationship between earnings and financial reporting transparency is significantly negative.