ABSTRACT Common institutional ownership (CIO), as an emerging shareholding model, has attracted much attention for its governance effect on firms. Based on the sample data of Chinese Shanghai and Shenzhen A‐share listed companies from 2007 to 2023, we demonstrate that CIO exerts a synergistic governance effect and inhibits corporate information disclosure violations. Mechanism tests show that CIO reduces the pressure on capital market performance and alleviates the two types of agency problems, thereby having a dampening effect on corporate disclosure violations. Moreover, this inhibitory effect is more significant in companies with higher equity balance, in non‐state‐owned enterprises, and in firms with higher capital intensity. The research conclusions provide new clues and basis for preventing and governing corporate information disclosure violations.
Wei et al. (Thu,) studied this question.