Research On The Non-financial Information Disclosure Of Overseas Listed Companies (H-share)

The author selects the English version annual reports of60Chinese overseaslisted companies (H-share) as a sample and conducts an empirical study ofnon-financial disclosure from the perspective of impression management. There aretwo common ways in the annual report impression management: the manipulation ofreadability and self-attribution.As to the readability of annual reports, the author calculates the average Fleschreadability score and Fog readability scores. The results indicate the readability of theChinese overseas listed companies’(H-share) annual reports attribute to the categoryof "difficult to read" or "very difficult to read". The majority of stakeholders wouldfeel difficult to read the repots, which indicate that the quality of non-financialinformation disclose still needs to be improved. The sample annual reports are dividedinto two groups in accordance with the year to year change rate of the basic earningsper share. The author conducts two T-tests of the Flesch readability score and Fogreadability score. The results show that there are no significant correlation betweenthe annual report readability and the cooperate performance. The author fails to findany evidence of impression management through manipulating the readability.Meanwhile, the author conducts a case study by selecting two annual reports withdifferent readability scores. The results show that the annual report with lowreadability score has the follow characteristics: high word quantity per sentence, highpercentage of complex vocabulary and lacking of logic.As to the self-attribution in the annual report, the author conducts a case study byselecting the annual reports of two companies with different corporate performance.From the perspective of the annual report contents, the author finds that the tendencyof self-attribution is obvious. Managers are more likely to attribute the poorperformance to the harsh external environment, while attribute the good performanceto excellent management.In summary, the overall readability level of Chinese overseas listed companies’(H-share) English version annual report is quite low, thus the quality of non-financialdisclosure still needs to be improved. Meanwhile, the author fails to find any evidenceof impression management through manipulating the readability, but theself-attribution is quite common.