Table 4 Excess disclosure quality...

Table 4

Excess disclosure quality ratings and future outcomes

	Intermediation		Analyst forecast properties		Securities enforcement
Dependent variable	F_INST	F_ANA	F_FERRORS	F_DISPERSION	F_ENFORCE	F_ANNLETT
	(1)	(2)	(3)	(4)	(5)	(6)
INFO	0.0066***	0.5007***	−0.0065***	−0.0014***	−0.0828***	−0.0599***
INFO	[4.055]	[4.594]	[−7.718]	[−4.890]	[−16.467]	[−15.309]
EXCH	−0.0000	−0.0085	0.0020	0.0002	0.0459***	0.0306***
EXCH	[−0.017]	[−0.055]	[1.054]	[0.341]	[5.815]	[5.424]
CSRC	−0.0034	−0.0740	0.0015	−0.0003	0.0466***	0.0307***
CSRC	[−0.962]	[−0.435]	[0.713]	[−0.391]	[4.806]	[4.319]
ST	0.0002	0.2984	0.0052	0.0035*	−0.0098	0.0029
ST	[0.032]	[1.482]	[1.156]	[1.737]	[−0.700]	[0.266]
ANNLETT	0.0027	−0.1209	0.0080***	0.0008	0.0444***	0.0838***
ANNLETT	[0.905]	[−0.997]	[3.417]	[1.174]	[5.760]	[14.836]
OTHLETTS	−0.0030*	−0.1116**	0.0011	0.0006*	0.0202***	0.0268***
OTHLETTS	[−1.947]	[−2.322]	[0.999]	[1.658]	[6.092]	[9.460]
MALETTS	0.0076**	0.1190	0.0005	−0.0001	0.0091	0.0026
MALETTS	[1.977]	[0.695]	[0.241]	[−0.107]	[0.951]	[0.358]
QUALIFIED	−0.0305***	0.1457	0.0393***	−0.0032	0.1140***	0.0161
QUALIFIED	[−3.529]	[0.701]	[2.856]	[−1.431]	[7.321]	[1.328]
AMEND	−0.0005	−0.2886*	0.0003	0.0004	0.0168**	0.0221***
AMEND	[−0.199]	[−1.951]	[0.216]	[0.772]	[2.234]	[3.980]
ICWEAK	−0.0245**	0.2582	0.0022	0.0001	0.0552***	−0.0520***
ICWEAK	[−2.321]	[0.961]	[0.307]	[0.054]	[2.909]	[−3.461]
LATE	−0.0504***	0.0433	0.0111	0.0010	0.0734***	0.0104
LATE	[−3.210]	[0.148]	[0.741]	[0.284]	[2.613]	[0.448]
SHORTFALL	0.0039	−0.1243	−0.0006	0.0017**	0.0025	0.0141*
SHORTFALL	[1.080]	[−0.669]	[−0.326]	[2.029]	[0.225]	[1.752]
ESGREPORT	0.0048**	0.2576	−0.0021**	−0.0001	−0.0292***	−0.0126**
ESGREPORT	[2.096]	[1.589]	[−2.269]	[−0.371]	[−4.147]	[−2.198]
DIVS	−0.0055***	−0.0526	−0.0010	−0.0003	−0.0113**	−0.0247***
DIVS	[−3.677]	[−0.612]	[−1.405]	[−1.002]	[−2.401]	[−6.550]
BRIEFINGS	−0.0125***	−0.3117***	0.0004	0.0002	0.0044	−0.0009
BRIEFINGS	[−9.007]	[−4.293]	[0.894]	[1.228]	[1.248]	[−0.301]
AGE	−0.0000	−0.0064***	0.0000***	0.0000	0.0001***	0.0001***
AGE	[−1.385]	[−8.700]	[4.560]	[1.290]	[2.958]	[2.883]
SH	0.0059***	0.3691***	−0.0037***	−0.0008**	−0.0189***	−0.0809***
SH	[3.160]	[2.985]	[−4.661]	[−2.129]	[−3.245]	[−17.387]
LN_AT	0.0011	0.7504***	0.0034***	0.0014***	0.0113***	0.0178***
LN_AT	[0.857]	[9.794]	[6.250]	[6.114]	[3.151]	[6.503]
LEV	0.0193***	−0.5783**	0.0189***	0.0094***	0.0422**	−0.0027
LEV	[3.040]	[−1.962]	[6.058]	[7.942]	[2.505]	[−0.199]
ROA	0.1054***	12.1481***	−0.0036	0.0362***	−0.3550***	−0.3564***
ROA	[5.038]	[10.114]	[−0.278]	[6.780]	[−6.631]	[−8.170]
LOSS	0.0019	1.2769***	0.0112***	0.0069***	0.0248**	0.0567***
LOSS	[0.475]	[7.644]	[3.782]	[6.741]	[2.473]	[7.753]
ACCRUALS	−0.0805***	−8.4635***	0.0204***	−0.0074***	0.1752***	0.1786***
ACCRUALS	[−5.991]	[−10.408]	[3.025]	[−2.735]	[4.712]	[5.914]
MB	0.0001	0.0654***	−0.0006***	−0.0004***	0.0005	0.0022***
MB	[0.324]	[5.514]	[−5.832]	[−7.280]	[0.778]	[5.254]
RET	0.0122***	3.8000***	−0.0117***	−0.0019***	−0.0143**	−0.0332***
RET	[5.426]	[23.781]	[−13.736]	[−5.774]	[−2.170]	[−5.956]
VOL	−0.7760***	−2.8183	0.1823***	0.0882***	0.0198	−0.5503**
VOL	[−7.717]	[−0.442]	[4.217]	[4.829]	[0.068]	[−2.249]
NUMSUSP	0.0060***	−0.1323*	0.0003	0.0005**	0.0144***	0.0013
NUMSUSP	[4.077]	[−1.727]	[0.449]	[2.225]	[3.818]	[0.411]
ISSUE	−0.0099**	−1.4677***	0.0137***	0.0035***	0.0534***	0.0590***
ISSUE	[−2.444]	[−6.502]	[4.825]	[3.661]	[5.051]	[7.475]
RESTRUCT	0.0257***	0.0089	0.0003	0.0005	0.0065	0.0369***
RESTRUCT	[4.684]	[0.039]	[0.100]	[0.690]	[0.485]	[3.816]
BIGAUD	0.0022	−0.0977	−0.0013	−0.0001	−0.0107**	−0.0067
BIGAUD	[1.311]	[−0.884]	[−1.645]	[−0.321]	[−2.066]	[−1.621]
DUALITY	−0.0040*	0.2695**	0.0000	−0.0004	0.0117**	0.0015
DUALITY	[−1.956]	[2.120]	[0.036]	[−1.147]	[2.022]	[0.343]
BDSIZE	0.0001	0.0027	−0.0002	−0.0000	0.0019*	0.0010
BDSIZE	[0.352]	[0.138]	[−1.094]	[−0.218]	[1.949]	[1.372]
BDINDIE	0.0144	1.8691***	−0.0063	−0.0013	−0.0184	−0.0316
BDINDIE	[1.282]	[2.687]	[−1.254]	[−0.697]	[−0.545]	[−1.212]
SOE	0.0258***	−0.2140	−0.0067***	−0.0010**	−0.0867***	−0.0651***
SOE	[11.368]	[−1.325]	[−6.192]	[−2.127]	[−11.304]	[−10.740]
CROSS	0.0161***	1.3068***	−0.0013	0.0012	−0.0302	−0.0470***
CROSS	[3.227]	[2.849]	[−0.643]	[0.998]	[−1.337]	[−2.641]
INST	0.7820***	1.6351***	−0.0136***	−0.0035***	−0.0471***	−0.0309***
INST	[163.822]	[5.789]	[−7.647]	[−5.186]	[−3.694]	[−3.131]
ANA	−0.0006***	0.6200***	−0.0002***	−0.0000	−0.0015***	−0.0028***
ANA	[−5.407]	[56.353]	[−3.902]	[−1.013]	[−4.090]	[−9.117]
Industry fixed effects	Yes	Yes	Yes	Yes	Yes	Yes
Year fixed effects	Yes	Yes	Yes	Yes	Yes	Yes
No. of obs	19,135	19,135	13,007	10,782	21,782	21,782
Adj. R²/Pseudo R²	83.2%	59.6%	10.9%	8.9%	17.7%	29.7%

	Intermediation		Analyst forecast properties		Securities enforcement
Dependent variable	F_INST	F_ANA	F_FERRORS	F_DISPERSION	F_ENFORCE	F_ANNLETT
	(1)	(2)	(3)	(4)	(5)	(6)
INFO	0.0066***	0.5007***	−0.0065***	−0.0014***	−0.0828***	−0.0599***
INFO	[4.055]	[4.594]	[−7.718]	[−4.890]	[−16.467]	[−15.309]
EXCH	−0.0000	−0.0085	0.0020	0.0002	0.0459***	0.0306***
EXCH	[−0.017]	[−0.055]	[1.054]	[0.341]	[5.815]	[5.424]
CSRC	−0.0034	−0.0740	0.0015	−0.0003	0.0466***	0.0307***
CSRC	[−0.962]	[−0.435]	[0.713]	[−0.391]	[4.806]	[4.319]
ST	0.0002	0.2984	0.0052	0.0035*	−0.0098	0.0029
ST	[0.032]	[1.482]	[1.156]	[1.737]	[−0.700]	[0.266]
ANNLETT	0.0027	−0.1209	0.0080***	0.0008	0.0444***	0.0838***
ANNLETT	[0.905]	[−0.997]	[3.417]	[1.174]	[5.760]	[14.836]
OTHLETTS	−0.0030*	−0.1116**	0.0011	0.0006*	0.0202***	0.0268***
OTHLETTS	[−1.947]	[−2.322]	[0.999]	[1.658]	[6.092]	[9.460]
MALETTS	0.0076**	0.1190	0.0005	−0.0001	0.0091	0.0026
MALETTS	[1.977]	[0.695]	[0.241]	[−0.107]	[0.951]	[0.358]
QUALIFIED	−0.0305***	0.1457	0.0393***	−0.0032	0.1140***	0.0161
QUALIFIED	[−3.529]	[0.701]	[2.856]	[−1.431]	[7.321]	[1.328]
AMEND	−0.0005	−0.2886*	0.0003	0.0004	0.0168**	0.0221***
AMEND	[−0.199]	[−1.951]	[0.216]	[0.772]	[2.234]	[3.980]
ICWEAK	−0.0245**	0.2582	0.0022	0.0001	0.0552***	−0.0520***
ICWEAK	[−2.321]	[0.961]	[0.307]	[0.054]	[2.909]	[−3.461]
LATE	−0.0504***	0.0433	0.0111	0.0010	0.0734***	0.0104
LATE	[−3.210]	[0.148]	[0.741]	[0.284]	[2.613]	[0.448]
SHORTFALL	0.0039	−0.1243	−0.0006	0.0017**	0.0025	0.0141*
SHORTFALL	[1.080]	[−0.669]	[−0.326]	[2.029]	[0.225]	[1.752]
ESGREPORT	0.0048**	0.2576	−0.0021**	−0.0001	−0.0292***	−0.0126**
ESGREPORT	[2.096]	[1.589]	[−2.269]	[−0.371]	[−4.147]	[−2.198]
DIVS	−0.0055***	−0.0526	−0.0010	−0.0003	−0.0113**	−0.0247***
DIVS	[−3.677]	[−0.612]	[−1.405]	[−1.002]	[−2.401]	[−6.550]
BRIEFINGS	−0.0125***	−0.3117***	0.0004	0.0002	0.0044	−0.0009
BRIEFINGS	[−9.007]	[−4.293]	[0.894]	[1.228]	[1.248]	[−0.301]
AGE	−0.0000	−0.0064***	0.0000***	0.0000	0.0001***	0.0001***
AGE	[−1.385]	[−8.700]	[4.560]	[1.290]	[2.958]	[2.883]
SH	0.0059***	0.3691***	−0.0037***	−0.0008**	−0.0189***	−0.0809***
SH	[3.160]	[2.985]	[−4.661]	[−2.129]	[−3.245]	[−17.387]
LN_AT	0.0011	0.7504***	0.0034***	0.0014***	0.0113***	0.0178***
LN_AT	[0.857]	[9.794]	[6.250]	[6.114]	[3.151]	[6.503]
LEV	0.0193***	−0.5783**	0.0189***	0.0094***	0.0422**	−0.0027
LEV	[3.040]	[−1.962]	[6.058]	[7.942]	[2.505]	[−0.199]
ROA	0.1054***	12.1481***	−0.0036	0.0362***	−0.3550***	−0.3564***
ROA	[5.038]	[10.114]	[−0.278]	[6.780]	[−6.631]	[−8.170]
LOSS	0.0019	1.2769***	0.0112***	0.0069***	0.0248**	0.0567***
LOSS	[0.475]	[7.644]	[3.782]	[6.741]	[2.473]	[7.753]
ACCRUALS	−0.0805***	−8.4635***	0.0204***	−0.0074***	0.1752***	0.1786***
ACCRUALS	[−5.991]	[−10.408]	[3.025]	[−2.735]	[4.712]	[5.914]
MB	0.0001	0.0654***	−0.0006***	−0.0004***	0.0005	0.0022***
MB	[0.324]	[5.514]	[−5.832]	[−7.280]	[0.778]	[5.254]
RET	0.0122***	3.8000***	−0.0117***	−0.0019***	−0.0143**	−0.0332***
RET	[5.426]	[23.781]	[−13.736]	[−5.774]	[−2.170]	[−5.956]
VOL	−0.7760***	−2.8183	0.1823***	0.0882***	0.0198	−0.5503**
VOL	[−7.717]	[−0.442]	[4.217]	[4.829]	[0.068]	[−2.249]
NUMSUSP	0.0060***	−0.1323*	0.0003	0.0005**	0.0144***	0.0013
NUMSUSP	[4.077]	[−1.727]	[0.449]	[2.225]	[3.818]	[0.411]
ISSUE	−0.0099**	−1.4677***	0.0137***	0.0035***	0.0534***	0.0590***
ISSUE	[−2.444]	[−6.502]	[4.825]	[3.661]	[5.051]	[7.475]
RESTRUCT	0.0257***	0.0089	0.0003	0.0005	0.0065	0.0369***
RESTRUCT	[4.684]	[0.039]	[0.100]	[0.690]	[0.485]	[3.816]
BIGAUD	0.0022	−0.0977	−0.0013	−0.0001	−0.0107**	−0.0067
BIGAUD	[1.311]	[−0.884]	[−1.645]	[−0.321]	[−2.066]	[−1.621]
DUALITY	−0.0040*	0.2695**	0.0000	−0.0004	0.0117**	0.0015
DUALITY	[−1.956]	[2.120]	[0.036]	[−1.147]	[2.022]	[0.343]
BDSIZE	0.0001	0.0027	−0.0002	−0.0000	0.0019*	0.0010
BDSIZE	[0.352]	[0.138]	[−1.094]	[−0.218]	[1.949]	[1.372]
BDINDIE	0.0144	1.8691***	−0.0063	−0.0013	−0.0184	−0.0316
BDINDIE	[1.282]	[2.687]	[−1.254]	[−0.697]	[−0.545]	[−1.212]
SOE	0.0258***	−0.2140	−0.0067***	−0.0010**	−0.0867***	−0.0651***
SOE	[11.368]	[−1.325]	[−6.192]	[−2.127]	[−11.304]	[−10.740]
CROSS	0.0161***	1.3068***	−0.0013	0.0012	−0.0302	−0.0470***
CROSS	[3.227]	[2.849]	[−0.643]	[0.998]	[−1.337]	[−2.641]
INST	0.7820***	1.6351***	−0.0136***	−0.0035***	−0.0471***	−0.0309***
INST	[163.822]	[5.789]	[−7.647]	[−5.186]	[−3.694]	[−3.131]
ANA	−0.0006***	0.6200***	−0.0002***	−0.0000	−0.0015***	−0.0028***
ANA	[−5.407]	[56.353]	[−3.902]	[−1.013]	[−4.090]	[−9.117]
Industry fixed effects	Yes	Yes	Yes	Yes	Yes	Yes
Year fixed effects	Yes	Yes	Yes	Yes	Yes	Yes
No. of obs	19,135	19,135	13,007	10,782	21,782	21,782
Adj. R²/Pseudo R²	83.2%	59.6%	10.9%	8.9%	17.7%	29.7%

Note(s): Table 4 reports the relation between excess disclosure quality ratings and future outcomes including intermediation, analyst forecast properties, and securities enforcement. Intermediation measures are F_INST (institutional ownership) and F_ANA (analyst following) in the year following the announcement of the assessment result in columns (1) and (2). Analyst forecast properties are F_FERRORS (analyst forecast errors) and F_DISPERSION (analyst forecast dispersion) in the year following the announcement of the assessment result in columns (3) and (4). Securities enforcement measures are F_ENFORCE (indicator of CSRC enforcement actions or disciplinary actions from the stock exchange) and F_ANNLETT (indicator of the receipt of a comment letter on the annual report) in the year following the announcement of the assessment result in columns (5) through (6). The models are OLS in columns (1) through (4) and Probit in columns (5) and (6). Marginal effects at the mean are reported as coefficients for the Probit models. Detailed variable definitions are in Appendix 2. t-statistics or z-statistics underneath the coefficients are based on standard errors clustered at the firm. ***, **, and * denote two-tailed statistical significance at the 1%, 5%, and 10% level, respectively

Source(s): Table created by authors

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