State Minority Ownership and Financial Reporting Quality: Evidence from China's Private Sector
DOI:
https://doi.org/10.54097/v2sb4w03Keywords:
State-owned Capital Participation, Accounting Information Quality, Major Shareholder Asset Stripping, Operational Risk, Governance StandardsAbstract
This paper investigates the impact of state-owned capital participation on the quality of accounting information in private enterprises. The study finds that an increase in the level of state-owned capital participation contributes to improving the quality of accounting information in private enterprises. Mechanism tests indicate that curbing asset stripping by major shareholders, reducing operational risks are key channels through which state-owned capital participation improves the quality of accounting information in private enterprises. These findings contribute to a deeper theoretical understanding of mixed-ownership reform in private enterprises, whilst also providing valuable insights for promoting improvements in corporate accounting information quality.
Downloads
References
[1] Francis, J., Nanda, D., & Olsson, P. (2008). Voluntary disclosure, earnings quality, and cost of capital. Journal of Accounting Research, 46(1), 53–99. https://doi.org/ 10.1111/j. 1475-679X.2008. 00267. X.
[2] Cull, R., Li, W., Sun, B., et al. (2015). Government connections and financial constraints: Evidence from a large representative sample of Chinese firms. Journal of Corporate Finance, 32, 271–294. https://doi.org/10.1016/j.jcorpfin.2015.04.002.
[3] Li, J. Z., Bin-Nashwan, S. A., Lao, Y., et al. (2025). Unraveling the impact of social media on accounting information disclosure: Does government supervision matter? Humanities and Social Sciences Communications, 12(1), 1–16. https:// doi. org/ 10.1057/s41599-025-04862-9.
[4] Shleifer, A., & Vishny, R. W. (1997). A survey of corporate governance. The Journal of Finance, 52(2), 737–783. https:// doi. org/10.1111/j.1540-6261. 1997. tb04820.x.
[5] Jiang, G., Lee, C. M. C., & Yue, H. (2010). Tunneling through intercorporate loans: The China experience. Journal of Financial Economics, 98(1), 1–20. https://doi.org/10. 1016/j. jfineco.2010.04.002.
[6] Faccio, M., Masulis, R. W., & McConnell, J. J. (2006). Political connections and corporate bailouts. The Journal of Finance, 61(6), 2597–2635. https://doi.org/10.1111/j.1540-6261.2006. 01009.x.
[7] Zhang, S., & Wang, Y. (2024). Executive legal background and quality of corporate accounting disclosure. International Review of Economics & Finance, 96, 103539. https://doi.org/ 10. 1016/j.iref.2024.103539.
[8] Li, Z., Han, J., Sun, X., et al. (2025). Digital transformation and accounting information quality: The role of environmental uncertainty in the era of digital. International Review of Economics & Finance, 105, 104588. https://doi.org/10. 1016/ j. iref. 2025.104588.
[9] Yang, Z., & He, M. (2025). How does digital asset allocation affect accounting information quality? A perspective from corporate profitability and ownership. Finance Research Letters, 81, 107492. https://doi.org/10.1016/j.frl.2025.107492.
[10] Yang, S., & Zhou, N. (2025). Artificial intelligence and the quality of corporate accounting information disclosure. Finance Research Letters, 83, 108136. https://doi.org/ 10.1016/ j.frl.2025.108136.
[11] Yan, Z., & Yinhui, H. (2025). Big Data Tax Collection and Administration and Quality of Corporate Accounting Information. Finance Research Letters, 83, 108041. https:// doi. org/ 10.1016/j.frl.2025.108041.
[12] Chen, H., Zhuang, W., Wang, Z., et al. (2024). Administrative audit regulation and the quality of accounting information: Evidence from China securities regulatory commission’s random inspection system. Research in International Business and Finance, 71, 102502. https://doi.org/ 10. 1016/j. ribaf. 2024. 102502.
[13] Zhang, Y. (2024). Capital market liberalization and accounting quality: Evidence from China. Finance Research Letters, 64, 105459. https://doi.org/10.1016/j.frl.2024.105459.
[14] Chen, Z., Cao, Y., & Liao, K. (2024). How state-owned equity participation promotes the digital transformation of nonstate-owned enterprises: Evidence from China. Finance Research Letters, 59, 104818. https://doi.org/10.1016/j.frl.2024.104818.
[15] Ni, B., Han, L., Liu, X., et al. (2025). Does state-owned equity participation matter for labor investment efficiency: Evidence from private listed firms. International Review of Financial Analysis, 98, 104716. https://doi.org/10. 1016/j.irfa. 2025. 104716.
[16] Gao, L., Chen, M., & Liu, S. (2025). State-owned capital participation and enterprise resilience. Finance Research Letters, 84, 109081. https://doi.org/10.1016/j.frl.2025.109081.
[17] Zhang, Y., & Wang, L. (2025). Is mixed-ownership a profitable ownership structure?—Empirical evidence from China. Journal of Economics and Business, 138, 106257. https://doi. org/ 10.1016/j.jeconbus.2025.106257.
[18] Dong, Y., & Liu, P. (2022). The effect of state capital injection on private firms’ performance: Evidence from Chinese industrial firms. China Economic Quarterly International, 2(2), 85–97. https://doi.org/10.1016/j.ceqi.2022.08.002.
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Academic Journal of Management and Social Sciences
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
