Ownership Structure and Information Disclosure in Sub- Saharan African Countries

Abstract

Purpose: This study examines the association between ownership structure and information disclosure using a sample of the listed non-financial firms in Sub-Saharan African countries.
 Design/Methodology/Approach: This study employed quantitative methods to examine the relationship between ownership structure and information disclosure. The population was non-financial firms listed in eleven countries in Sub-Saharan Africa. Data were sourced from the listed firms’ annual reports available online. The regression analysis was done using the fractional probit model. The dependent variable is the disclosure index which was developed using scores of various attributes of information disclosure through analysis of annual reports to identify whether the attributes were included in the annual reports. The firm scored 1 if the attribute was included in the annual report and zero otherwise. Thereafter, the scores were aggregated to obtain actual scores for each individual firm. Finally, the average score was computed by dividing aggregated actual score value by the expected score value.
 Findings: Findings indicate that concentrated ownership is significantly negatively associated with disclosure. Furthermore, the findings show government and foreign ownerships are positively and significantly associated with information disclosure. This study shows the effects of ownership structure on disclosure. Overall, the findings indicate that ownership structure is related to information disclosure.
 Research Limitation/Implication: This study focused on non-financial listed firms which their annual reports were available online. The interpretation of the results of these studies needs to consider this bias as may affect the generalizability of the results to all firms including those which do provide annual reports online.
 Practical Implications: The finding implies reforms should consider the presence of different characteristics of firms, in particular ownership structure, and their impacts on the firm propensity to disclose information.
 Social Implications: More specifically, the finding suggests that applying simple policies to specify types and levels of disclosure requirements to all firms may not be realistic because the concept of one size fits all may not be applicable.
 Originality/Value/Novelty: The study provides highlights on determinants of information disclosure which is one of the mechanisms for monitoring agency problems resulting from the conflict of interests between internal and external stakeholders of the firm. In this regard, this study extends research on the nexus of ownership structure and information disclosure to developing countries’ context and therefore contributes to understanding corporate governance around the globe.