Project-Level Disclosure and Investment Efficiency: Evidence From China

Jean Jinghan Chen, Xinsheng Cheng, Stephen X. Gong, Youchao Tan*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)


Different from studies that use rough proxies for aggregate accounting information quality to investigate its impact on investment efficiency, we construct a project-level measure of disclosures pertaining specifically to firms’ ongoing and future investments, using a large sample of Chinese listed firms. We first validate this measurement of project-level investment disclosure, finding that more detailed investment disclosures are associated with stronger market reactions, particularly among strong-governance firms. Furthermore, we find that project-level disclosure is associated with higher future investment efficiency for strong-governance firms, but not for weak-governance firms. Investigations into underlying channels reveal that well-governed firms with more investment disclosures face less financial constraints and are more likely to abandon poorly performing investments. Cross-sectional analyses suggest that project-level disclosure and governance play a more important role in settings where firms have stronger incentives for opportunistic disclosure. Overall, our evidence indicates that project-level disclosure interacts with corporate governance to impact investment efficiency. The results have implications for disclosure regulation and practice.

Original languageEnglish
Pages (from-to)854-880
Number of pages27
JournalJournal of Accounting, Auditing and Finance
Issue number4
Publication statusPublished - Oct 2021


  • China
  • corporate disclosure
  • corporate governance
  • investment efficiency
  • project-level disclosure


Dive into the research topics of 'Project-Level Disclosure and Investment Efficiency: Evidence From China'. Together they form a unique fingerprint.

Cite this