Factors Influencing The Extent Of Voluntary Disclosure

Voluntary information disclosure is concerned by both foreign and domestic esearchers. With the development of the environment of Chinese information lisclosure, and the enhancing demand of voluntary information from investors, it (?)ecomes a hot topic for the research of Chinese capital market. Seen from western countries'development of information disclosure, a mature capital market's nformation disclosure experienced three phases which are voluntary disclosure, mandatory disclosure and the combination of voluntary disclosure and mandatory whereas China is under the conversion period of the second and third phase, if the transition is dealt in a very smooth way, it will be a milestone of Chinese i nformation disclosure of capital market.Nowadays, most of the researches just concentrate on the theoretical area although the number of the related empirical study is rising. On the background of such situation; this paper modifies the foreign experts'voluntary disclosure index and establishes the index suitable to the China Mainland. The paper describes the situation of Chinese listed corporations, it is found that the items of voluntary disclosure of the annual reports are very few, and most of the corporations are vnwilling to disclose predicted information. Compared with foreign capital market, we have long way to go in respect of voluntary information disclosure.This study examines the relationships among corporate characteristics, the governance structure of the firm, and its disclosure policy. Empirical evidence supporting this investigation has been gathered from a sample of Chinese Listed corporations on SH and SZ Stock Exchange. This setting is of interest because of tie low level of investor protection, high ownership concentration, and poorly developed capital market. Our results show that a firm's size, along with some mechanisms of corporate governance such as the proportion of independent directors on the board, the appointment of an audit committee, and the stock option plans for motivation, is positively related to voluntary disclosure. We have also observed that cross-listing, and the ownership structure of the firm is influencing the disclosure policy of corporations.This paper includes four parts:â… . Introduction of backgroundsâ…¡. Analyze the basic theories of voluntary disclosureâ…¢. Discussing and research of how corporate governance and characteristics influence the extent of the corporate voluntary disclosureâ…£. Making recommendations based on the previous research to improve the voluntary disclosure mechanism in Chinese capital market.Through discussing and studying above, our research is based on corporate governance rules and corporate characteristics, and for the purpose of improving the voluntary disclosure mechanism in Chinese capital market, I am hoping that this paper could improve the efficiency of Chinese capital market.