Business

Better or worse? Revealing the impact of common institutional ownership on annual report readability

Z. Jiang, L. Hu, et al.

This intriguing study, conducted by Zhenyu Jiang, Lingshan Hu, and Zongjun Wang, reveals how common institutional ownership significantly reduces the readability of annual reports among Chinese listed companies. The study uncovers that this effect is magnified in environments with increased analyst attention, industry concentration, and media coverage, while also highlighting operational risks as mediators in this relationship.

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Abstract

This paper investigates the relationship between common institutional ownership (CIO) and annual report readability (ARR) using data on Chinese listed companies from 2007 to 2021. The findings reveal that CIO reduces ARR, a conclusion supported by robustness tests. Further analysis shows this negative relationship is stronger when analyst attention, industry concentration, and media coverage are high. Operational risks mediate the relationship between CIO and ARR. This study adds to the evidence supporting the collusive manipulation effect of CIO.

Publisher

Humanities & Social Sciences Communications

Published On

May 29, 2024

Authors

Zhenyu Jiang, Lingshan Hu, Zongjun Wang

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