Project-Level Disclosure and Investment Efficiency: Evidence From China
| Autor: | Xinsheng Cheng, Jean Jinghan Chen, Youchao Tan, Stephen X. H. Gong |
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| Rok vydání: | 2020 |
| Předmět: |
Measure (data warehouse)
business.industry Investment efficiency Corporate governance media_common.quotation_subject Economics Econometrics and Finance (miscellaneous) Aggregate (data warehouse) Accounting Accounting information system Quality (business) Business China Construct (philosophy) Finance media_common |
| Zdroj: | Journal of Accounting, Auditing & Finance. 36:854-880 |
| ISSN: | 2160-4061 0148-558X |
| Popis: | Different from studies that use rough proxies for aggregate accounting information quality to investigate its impact on investment efficiency, we construct a project-level measure of disclosures pertaining specifically to firms’ ongoing and future investments, using a large sample of Chinese listed firms. We first validate this measurement of project-level investment disclosure, finding that more detailed investment disclosures are associated with stronger market reactions, particularly among strong-governance firms. Furthermore, we find that project-level disclosure is associated with higher future investment efficiency for strong-governance firms, but not for weak-governance firms. Investigations into underlying channels reveal that well-governed firms with more investment disclosures face less financial constraints and are more likely to abandon poorly performing investments. Cross-sectional analyses suggest that project-level disclosure and governance play a more important role in settings where firms have stronger incentives for opportunistic disclosure. Overall, our evidence indicates that project-level disclosure interacts with corporate governance to impact investment efficiency. The results have implications for disclosure regulation and practice. |
| Databáze: | OpenAIRE |
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