Dual-class capital structures create a gap (“wedge”) between voting and cash flow rights. Our analysis indicates that the larger the wedge, the higher the quality of financial reporting, reflecting a tradeoff between the dilution of voting rights and enhancement of the credibility of information provided to investors. It suggests that increasing management’s insulation from the market for corporate control is stronger than agency costs, reducing motivation to manipulate earnings. Moreover, better quality reporting allows for attracting second-class investors who agree to a larger wedge. Therefore, concerning financial reporting, a nuanced regulation restricting wedge size may not be more effective.

双层资本结构在投票权和现金流权之间造成了差距（“楔子”）。我们的分析表明，楔形越大，财务报告的质量就越高，这反映了投票权稀释与向投资者提供信息的可信度增强之间的权衡。它表明，增加管理层与公司控制市场的隔离程度比代理成本更强，从而降低了操纵收益的动机。此外，更高质量的报告可以吸引同意更大楔子的二流投资者。因此，就财务报告而言，限制楔形大小的细微规定可能不会更有效。