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

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.... show more
Abstract
Based on the data on Chinese listed companies over the period from 2007–2021, the relationship between common institutional ownership (CIO) and annual report readability (ARR) is revealed in this paper. The results show that CIO reduces ARR. After a series of robustness tests, this conclusion continues to hold. Further analyses indicate that in situations where analyst attention, industry concentration, and media coverage are high, the above negative relationship is more significant. In addition, operational risks play a mediating role between CIO and ARR. This study enriches 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
DOI
https://doi.org/10.1057/s41599-024-03162-7
Tags
common institutional ownership
annual report readability
Chinese listed companies
analyst attention
media coverage
operational risks
collusive manipulation

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