The Value Relevance And Moderation Of Mandatory Disclosure: Evidence From Chinese Listed Companies

On the basis of the value relevance of mandatory disclosure, this paper aims to examine the moderation of mandatory disclosure in Chinese stock market. Using the evaluation results of listed firms' mandatory disclosure from Shenzhen Stock Exchange (SSE) and the financial data of 372 listed firms in SSE, we build a panel data model to do empirical research.The conclusions are:(1) mandatory disclosure has a highly significant but negative relationship with firm value since the listed firms'net benefits of disclosure are negative; (2) the linear relation between mandatory disclosure and firm value is also influenced by asset size, liability, profitability, and market risk; (3) the regulation of information disclosure must be moderate in Chinese stock market; (4) the negative relationship between mandatory disclosure and firm value is more significant for listed firms in competitive industries than for those in noncompetitive industries; (5) for listed firms which have a high level of mandatory disclosure, the negative relationship between mandatory disclosure and firm value is bigger for firms in competitive industries than for those in noncompetitive industries.Therefore, the regulatory authorities in Chinese securities market should enforce moderate information disclosure regulation; exert stiffer penalties on disclosure irregularities and perfect securities related civil compensation system; enhance education on investors in order to improve their abilities to analyze and understand information; take consideration of industry competition when perfect information disclosure regulation; and encourage listed firms to increase the level of voluntary disclosure.