Higher Disclosure Research Articles

Sponsorship Disclosure in Social Media Influencer Marketing: The Algorithmic and Non-Algorithmic Barriers

The growth of social media influencer marketing has created sophisticated opportunities for deceptive marketing practices to proliferate online. While sponsorship disclosures alert consumers to the commercial nature of social media content and are required in different jurisdictions around the world, many influencer ads do not incorporate disclosures that comply with applicable laws. Building on Bourdieu’s theory of field as the theoretical lens, this research examines the disconnect between formal regulation and on-the-ground influencer marketing practices in Canada by investigating the current barriers to compliant sponsorship disclosure. Using semi-structured interviews with influencer relations professionals, who play an intermediary role between brands and influencers, the research explicates the (1) algorithmic challenges (e.g., algorithmic deprioritization or shadowbanning) and (2) non-algorithmic challenges (e.g., lengthy disclosure processes) to maintaining high disclosure standards. The research identifies the strategies influencer intermediaries can use to achieve upfront and conspicuous disclosure in a social media landscape where the algorithmic determinants of success are unpredictable, and the adaptation of applicable legal frameworks is traditionally slow.

Fiscal-audit separation and government disclosure quality

We show that the separation of the fiscal and audit offices of China’s province-level governments leads to high fiscal disclosure quality, an effect that is more pronounced when the political rank of the official in charge of auditing is higher than that of the official in charge of fiscal matters. Dynamically, disclosure quality decreases when fiscal office and audit office go from being separated to being integrated and improves when they go from being integrated to being separated. Finally, fiscal disclosure quality reduces the cost of debt and improves credit ratings of municipal investment and development bonds. We demonstrate an aspect of China’s governance that, even without adequate monitoring from the oppositions or the media, local governments can improve efficiency via horizontal separations of fiscal and audit offices.

Quality of Financial Information Disclosure and Efficiency of Resource Allocation Under Dual-Track System: Empirical Evidence of Registration System Reform in China

ABSTRACT This study examined the listed companies in China’s National Equities Exchange and Quotations (NEEQ) from 2014 to 2021 to investigate the influence of the financial disclosure quality of IPO companies on the speed of passing in different systems of registration and approval from the perspective of resource allocation efficiency. In the trial registration system, high-quality financial disclosure was found to significantly improve IPO enterprises’ speed of passing, while venture capital and its characteristic variables enhanced the relationship between the financial disclosure quality and speed of passing; Distinguishing between regional marketability and firm characteristics attributes reveals that the contribution of venture capital to the relationship between financial disclosure quality and speed of passing is more pronounced in the sample of firms in low marketability regions, high technology, and smaller size. In addition, further research shows that the enterprises with high financial disclosure quality in the registration system sample have higher long-term excess returns after listing. Finally, the conclusion is still robust after using the generalized tendency matching score (GPSM) and instrumental variable method (IV) to eliminate endogenous interference. The conclusion provides empirical support and a theoretical basis for reforming the registration and issuance system in emerging market countries.

Analisis Tingkat Pengungkapan Laporan Keuangan Pemerintah Daerah di Sumatera

The purpose of this study was to determine the level of financial reporting disclosure of provincial/district/city governments in Sumatra in 2020. The study population was 164 local government financial reports. The sampling technique used is a saturated sampling technique, namely a sampling technique that uses all members of the population as a sample. The data used is secondary data in the form of data and information on financial statements of provincial/district and city governments in Sumatra. This study uses 7 disclosure indicators, with a total of 302 mandatory disclosures. The results show that the level of disclosure in the financial statements of provincial/district and city governments in Sumatra is still low. The average level of disclosure is 54.47%. In future research, it is expected to conduct interviews and observations to identify the factors that cause high and low disclosures in local government financial statements.

Information disclosure as a means of minimizing asymmetric financial reporting: The role of market reaction

This study investigates the effect of information disclosure on financial accounting information comparability. We use a sample of Chinese A-share companies listed from 2001 to 2018 and discover that higher information disclosure quality can increase financial accounting information comparability. Our results reveal that high information disclosure ratings attract greater investor and analyst interest than does increased liquidity and that increased financial accounting information comparability is the main transmission pathway for this effect. Furthermore, the results remain robust after instrumental variables are used to solve endogeneity problems and also after robustness tests. Our findings suggest that regulatory activity to improve public firms’ information disclosure in the Chinese stock market can increase the market’s efficiency. In addition, when facing agency problems, enterprises should defer to external supervision and governance from investors.

Female Directors, Sustainability Steering Committee and E-Waste Information Disclosure in Malaysian Technology and Telecommunication Industries

The digitalisation era has brought an environmental issue regarding the generation of electrical and electronic waste (e-waste). The global scenario has started questioning how these appliances are taken care of when they reach the end of their useful lives. The advent of these obsolete appliances has created a catastrophe for the health of humans and the environment. Furthermore, business firms in telecommunication and technology industries face the pressure to engage in more severe action towards e-waste management and to report the activities in the annual reports due to their activities which are highly related to the generation of e-waste. In addressing this issue, the study intends to examine the e-waste information disclosure by firms in the two industries. In addition, the study also investigates if the e-waste information disclosure would differ between firms with more female directors and with a sustainability steering committee compared to their counterparts. This study hypothesises that firms with high female directors and a sustainability steering committee will show significantly higher e-waste information disclosure by utilising the virtue ethics theory. Fifty-nine companies of Bursa Malaysia listed firms in the technology and telecommunication industries were taken as samples. The results were consistent with the hypotheses, where firms with a high proportion of female directors and firms with a sustainability steering committee exhibit significantly high e-waste information disclosure compared to their counterparts. The results from this study may give some insights into how business firms address their e-waste management issue and can be significant in achieving the Sustainable Development Goals (SDGs).

Does ESG Disclosure Transparency Mitigate the COVID-19 Pandemic Shock? An Empirical Analysis of Listed Firms in the UK

This paper examines whether the ESG reporting transparency of listed firms in the UK can play a role in mitigating the impact of the COVID-19 pandemic. We investigate 350 UK firms in the FTSE350 index from 2016 to 2021 with daily data on stock performance and annual data on financial performance. The empirical results show that firms with a high ESG disclosure score have a lower volatility of stock performance during the COVID-19 pandemic. For these firms, the negative relationship between stock performance, as well as financial performance, and their main driving factors, is lower during the COVID-19 pandemic. Among these factors, we identify the lockdown announcement, quantitative easing announcement, and the intensity of news media coverage of the company. These results tend to indicate that the quantity of ESG data reported by firms can contribute to mitigating the impact of the COVID-19 pandemic on stock performance volatility and financial performance.JEL Code: G3

The optimal vehicle product line strategy considering product information disclosure under government carbon regulation

As customers focus on information disclosure of new energy vehicles and automakers attach great importance to product line strategies under carbon regulation, we study the manufacturer's optimal product line strategy considering product information disclosure under the government's carbon regulation. This study contributes to the emerging vehicle product line area by investigating how manufacturers can establish reasonable vehicle product lines and the impact of different carbon regulation policies on product line strategies. Through comprehensive analyses, we find that the carbon tax rate and carbon trading price affect the revenue of different product lines of the manufacturer and the information disclosure level of products. Importantly, we find that if the valuation (market price) of fuel vehicles is low, manufacturers should adopt a single product line strategy. Conversely, if the valuation (market price) of fuel vehicles is high, manufacturers should adopt a hybrid product line strategy. Moreover, our analyses indicate that when the market valuation of new energy vehicles is high and the valuation of fuel vehicles is low, or when the market valuation of new energy vehicles is low and the valuation of fuel vehicles is moderate, manufacturers prefer to produce new energy vehicle to fuel vehicle. In terms of regret aversion strategies for product line design, our research reveals that a low carbon tax rate (carbon trading price) is beneficial to the fuel vehicle, while a high carbon tax rate(carbon trading price) and high information disclosure cost are beneficial to the revenue of new energy vehicle. Finally, we obtain the automakers’ preferences for carbon regulatory policies through manufacturers’ willingness to disclose information, tax rate and carbon trading price.

The impact of environmental information disclosure on green innovation in extractive enterprises: Promote or crowd out?

Environmental information disclosure (EID) is an essential manifestation of a firm's Environment, Social, and Governance (ESG) strategy. However, there is no consensus on whether EID can improve extractive enterprise green innovation. Drawing on data from Chinese-listed extractive industries companies for the period 2002–2017, this paper disentangles the complex impact of EID on green innovation by using the difference-in-difference method. The results show that the EID policy improves the overall green innovation performance of the extractive firms, but this improvement is mainly driven by the utility model patents rather than green invention patents with higher innovation levels. The dynamic effects show that the green innovation effect of EID has an upward trend after a three-year lag. Moreover, the green innovation effect in regions with high information disclosure intensity and state-owned enterprises is more prominent. Moreover, the mechanism tests reveal that although the resource crowding-out effect will hinder green innovation activities, EID can stimulate firms to conduct green innovation activities by alleviating financing constraints, increasing internal incentives, and imposing external pressure. Our findings provide the necessary empirical support for the government to promote the voluntary instruments.

Implementasi Prinsip Isi dan Kualitas pada Laporan Keberlanjutan

Sustainability report provides an overview of how corporate manages their operations and implementing various efforts towards sustainable and responsible business based on the economy, environment, and social performance according to 17 Sustainable Development Goals. Study case was made to examine development of content and quality principle based on Global Reporting Initiative Standard guidance of sustainability report in company listed on the Indonesia Stock Exhange for the 2018-2020 period. The objects used in this study are PT AKR Corporindo Tbk, PT Indocement Tunggal Prakarsa Tbk, PT Astra International Tbk, and PT Unilever Indonesia Tbk. Nonprobability sampling was carried out and data was collected from official company website. Quantitative and qualitative content analysis approach used in this study. The results of the study case show that based on content principle, the highest quantitative disclosure is materiality aspect and the lowest is stakeholder aspect, the highest qualitative disclosure is sustainability context and the lowest is completeness aspetc. Clarity aspect was the highest disclosure and reliability aspect was the lowest based on quality principle both on quantitative and qualitative. There was positive trend on sustainability report disclosure on public listed company eventhough only 12,67% from total 713 company between 2018-2020 period. Suggestions for further researchers is to be able to include other sector as research object, such as consumer cyclical, infrastructure, property, and technology sectors.

How can Chinese companies improve the quality of their corporate social responsibility information disclosure? A cross-level confgurational approach

Although more businesses are actively or passively disclosing social responsibility information, few studies have focused on the impact of multifactor combinations on the quality of corporate social responsibility (CSR) information disclosure. Given the causal complexity of CSR information disclosure, a configurational analysis that focused on China's listed companies was investigated using fuzzy-set qualitative comparative analysis (fsQCA). The results show that there are two types of paths to generate high CSR information disclosure quality: “strict context - strong capability” and “strict context - strong capability - high attention”. A crucial factor leading to high-quality disclosure differences in CSR information disclosure quality is the combination of media attention and internal control. Strict government regulation has a higher impact on firms' CSR information disclosure in polluting industries. The research conclusions contribute to exploring paths to improve CSR information disclosure quality from the configuration perspective, as well as the causes of the quality difference of CSR information disclosure. In addition, this study also provides a theoretical basis for the effectiveness of government regulation on the CSR information disclosure of heavily polluting enterprises and provides a direction for the future development of CSR management in China.

Menuju Sustainability: Apakah Lingkungan, Sosial dan Tata Kelola berdampak pada Kinerja Keuangan?

This study aims to assess the impact of Sustainability (sustainability) consisting of environmental, social and governance on the company's financial performance as measured by ROA and ROCE. This research uses a quantitative approach to manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2017-2021. A total of 13 companies were selected using the purposive sampling method, so that 65 sample data were obtained. The analysis method used in this study is a regression analysis of panel data. The results showed that environmental disclosure did not have an effect on ROA but environmental disclosure had a positive but not significant effect on ROCE. Social disclosure has a positive and significant effect on ROA. Social disclosure has no effect on ROCE. Governance disclosure has a positive and significant effect on ROA but governance disclosure has no effect on ROCE. High environmental disclosures will degrade the company's financial performance. Creating good environmental sustainability requires high costs and modern technology that will reduce the company's profits. Increasing corporate social disclosure, the company's financial performance will also increase. Disclosure of good corporate governance will lead to the achievement of good CSR outcomes so that it will contribute to good financial performance.

Analysing sustainability report using GRI index for fundamental labour rights and corporate governance

Based on their sustainability reports (SR), this study investigates Indonesian stated-owned companies’ compliance with fundamental labour rights and corporate governance (CG). Empirical and content analysis was carried out based on the Global Reporting Initiative (GRI) standard index published by 41 state-owned companies from 12 clusters in Indonesia. The study also compared the disclosure performance of several industrial-sector clusters by measuring each cluster’s total compliance rate. This study also analyses whether the high corporate governance disclosure will lead to a high level of fundamental labour rights reports. Using content analysis and multivariate analysis of WarpPLS, this study finds that companies tend to disclose clearly basic requirements on fundamental labour rights, such as information about new hires and employee turnover and essential information on corporate governance structure and composition (Martin et al., 2016; Sikka, 2008). In contrast, companies tend to hide information about reasonable notice of significant operational changes and critical concerns in companies. Based on the industrial sectors, the company in the energy, oil, and gas cluster have the highest level of compliance concerning corporate governance and labour disclosure. Then, this study also discovers that companies with high compliance levels on corporate governance disclosure tend to inform more in labour rights activities.

Factors Affecting Corporate Social Responsibility Web Disclosure: Evidence from the Consumer Sector in Indonesia

An increasing number of companies disclose information about their financial performance, however, publishing Corporate Social Responsibility information on company’s websites is still limited. This study examines the factors affecting Corporate Social Responsibility (CSR) web disclosure, as well as examine whether firms with high CSR web disclosure are less likely to engage in earnings management. Corporate Social Responsibility may indicate transparent and reliable financial statements. To do so, we investigate factors that affect the extensiveness of CSR web disclosure. In addition, we investigate the impact financial statement quality on CSR web disclosure. Based on a content analysis of the CSR web disclosure of consumer sector of Indonesia listed companies, this research analyzes the content of CSR disclosures with respect to the following four themes, include environmental information, employee information, community involvement information, and products information areas. Companies publish their CSR disclosure on company’s websites only during the year, therefore we could not collect data on its prior year. Using a sample of 94 consumer sector companies listed on the Indonesia Stock Exchange in 2020, our OLS regression results indicate that company size has a significant effect on CSR web disclosure. In contrast, there is no association between public share ownership, board of commissioner size, audit committee size, profitability, and leverage, on CSR web disclosure. We find no evidence of companies with high-level CSR web disclosure publishing more transparent and reliable financial statement than companies with low-level CSR web disclosure.

Suicide risk screening in the school environment: Family factors and profiles

Youth suicide is a major issue that schools have begun to address through a variety of approaches. Suicide risk assessment supports identification of students at risk and referral to services. Unfortunately, few suicide risk assessments incorporate family factors which can be useful for understanding level of risk and response options. Using data from 12,760 students screened in the Pennsylvania Student Assistance Program, this study identified family profiles of students and identified relationship between these profiles and suicide risk. Latent class analysis identified four family profiles (high, moderate, low risk, and minimal disclosure) which were related to suicide risk, school concerns (academic performance, bullying) and mental health concerns (depression severity, anxiety). Hierarchical regression modeling found that inclusion of the family risk profiles in assessment models showed significant improvement in identification of suicide risk. Overall, inclusion of family risk profiles improves suicide risk assessment and allows for more holistic and targeted responses by schools.

Complementary and integrative healthcare communication in Chinese American patient / primary care visits: An observational discourse analysis.

Chinese-American patients use CIH at high rates but disclosure of CIH use to clinicians is low. Further, the content of CIH talk between patients and their clinicians is not well described. We aimed to characterize CIH talk between Chinese-American patients and their primary care clinicians. Discourse analysis of 70 audio-recordings of language concordant and discordant-interpreted visits. Nearly half of all visits (48.6%) had some form of CIH communication. 'Simple CIH talk' focused on a single CIH topic resulting in a positive, neutral, or negative response by clinicians. 'CIH-furthering talk' was characterized by clinicians and patients addressing more than one CIH topic or including a combination of orientations to CIH by both clinicians and patients. CIH-furthering talk characterized by clinician humility could enhance rapport, cultural understanding, and open communication. CIH-furthering talk also led to miscommunication and retreat toward biomedicine. CIH communication occurred frequently during language concordant and discordant-interpreted visits with Chinese-American patients. Both patients and clinicians used CIH-furthering talk as a conversational resource for managing care. This discourse analysis of visits between Chinese-American patients and their clinicians advances understanding of CIH communication beyond disclosure, illustrating the complexity of linguistic and cultural nuances that affect patient care.

Behavior and Consequences of COVID-19-related Voluntary Disclosure: Evidence from Pharmaceutical Companies

With the explosion of COVID-19, a number of publicly traded companies in the pharmaceutical industry have thrown themselves into the development of novel coronavirus vaccines and therapeutics, and have voluntarily disclosed information about the development process. In this paper, six companies with different quality ratings of information disclosure in the pharmaceutical industry (refer to the results of the 2019 Shenzhen Stock Exchange quality assessment of information disclosure) were selected to explore the behavior and consequences of voluntary disclosure of information by listed companies in the pharmaceutical industry in China. The results show that voluntary disclosure of positive news will have a positive impact on the company’s share price. Companies with high disclosure quality ratings have lower price volatility before and after disclosure. Low-rated companies have volatile stock prices before and after disclosure, and the price gains are unsustainable for long periods of time, even falling back to lower levels than they were before disclosure. It is not the case that companies’ share prices do not fluctuate due to poor disclosure appraisal results, but rather they may cause a larger market reaction for the purpose of misleading investors. To some extent, this paper enriches the research on voluntary information disclosure of listed companies and will make listed companies understand the consequences of voluntary information disclosure on COVID-19-related issues, provide evidence for relevant supervisory authorities to regulate voluntary information disclosure further, and create a better voluntary information disclosure environment for China’s stock market.

Does earnings management affect linguistic features of MD&A disclosures?

Earnings management literature considers high disclosure complexity as indicative of obfuscation. We argue that this singular focus on disclosure complexity can be misleading as managers adopt other obfuscation strategies too to conceal earnings management. We examine several alternative obfuscation strategies using a sample of 67,649 management discussion and analysis (MD&A) disclosures of US firms from 1994 to 2020. We find that managers obfuscate not only by increasing the disclosure complexity but also by omitting negative information, reducing information content, and projecting confidence about the state of the business. Robustness tests suggest that our findings are robust to potential endogeneity concerns.

Examining the Sectorial Differences in ESG Practices of Select Companies in India : A Comparative Testing Based on Scores

A quest for sustainable development has propelled investors and corporates to adopt environmental, social, and governance (ESG) philosophy in their investment and business decisions. In this scenario, ESG scores appear to be an indicator of the sustainable performance of a firm. The present study seeks to compare the ESG practices of 100 top companies (by market capitalization) across 10 sectors in India. For analysis, CRISIL’s overall ESG scores and the scores of each of its dimensions have been used. Application of oneway ANOVA and Welch ANOVA reveals that there exist statistically significant differences between sectors on all the three dimensions of ESG viz; environment, social, and governance. Information Technology and Financials sectors turned out to be the leaders in ESG performance owing to low carbon footprints, water consumption and waste generation, and job-related injuries. Companies in cement, metals & mining, and chemicals were found to be underachievers due to their intrinsic nature of production resulting in the emission of toxic gases and a high propensity for energy and power usage. These sectors try to compensate for low environmental performance by undertaking numerous social welfare measures and high disclosures. It was also found that irrespective of the sector, companies’ environmental performance lagged behind social and governance performance.

The Relationship Between Ethics and Firm Turnover Among Investment Brokers

Unethical brokers wreak havoc on the personal and financial lives of their clients. However, in order to have confidence that a broker is ethical, clients must be able to identify warning signs. The occupational and demographic history of brokers may hold clues to a broker’s ethics. For example, brokers who move from firm to firm may be doing so to avoid legal trouble. However, moving from firm to firm may also simply reflect ambition. Thus, research is needed to determine if turnover is a legitimate warning sign for unethical behavior. Study 1 used an archival sample from the Financial Industry Regulatory Authority organization (i.e., FINRA; www.finra.org) to replicate and extend previous findings that frequent turnover is a warning sign for unethical behavior. We found that having been banned from trading or having high amount disclosures was associated with more turnover and less time spent at each firm. Study 2 surveyed 235 full time workers in the financial sector. Although we found no evidence that firm turnover was associated with legal concerns, we did find a negative relationship between time spent at their longest appointment and legal concerns. This association remained even when controlling for personality, workplace culture, greed, and ambition. These findings contribute to a greater understanding of how demographic variables may be useful for flagging unethical brokers.