Ownership Concentration, Financial Reporting Transparency and Firm Performance in Chinese Listed Firms

This study investigates how ownership concentration influences financial transparency and firm performance in Chinese listed companies. Using a balanced panel of 8,450 firm-year observations from 2020 to 2024, the analysis measures financial transparency through earnings aggressiveness and evaluates firm performance using Tobin’s Q, ROE, and ROA. The fixed-effects results show that higher ownership concentration is associated with lower financial transparency, suggesting that controlling shareholders may weaken incentives for broad and timely disclosure. In contrast, ownership concentration has a positive and significant effect on accounting-based performance, improving both ROA and ROE, while its impact on market valuation is insignificant. These findings imply that concentrated ownership strengthens internal monitoring and enhances operational efficiency but does not translate into higher market value. Robustness checks using winsorized variables confirm the stability of the results across specifications. The study contributes to a deeper understanding of governance dynamics in an emerging market where concentrated ownership remains prevalent.