Level Of Voluntary Disclosure Research Articles

The value relevance of voluntary disclosure through social media platforms: Evidence from European Union listed firms

This paper examines whether the level of voluntary disclosure through social media platforms provides value-relevant information. Economic theory suggests that information is value relevant whether it signals for something capable of increasing firm market value. Based on a sample of 200 European Union listed firms over the 2020-2022 period, we find that more voluntary disclosure through social media platforms increases firm market value, thus suggesting that it contains value-relevant information. Empirical evidence holds to several robustness checks, such as endogeneity tests, alternative regression specifications, and cross-sectional analyses. We further examine whether the level of voluntary disclosure through social media platforms influences the relationship between current returns and future earnings. We find that more voluntary disclosure improves the association between current returns and future earnings to the extent that current returns better reflect future earnings when firms provide more voluntary disclosure through social media platforms. This study adds to the growing academic debate on the role of social media usage for firm value.

Ownership structure and climate-related corporate reporting

ABSTRACT We investigate the impacts of various types of corporate ownership structures (i.e. institutional, government, and managerial ownership) on climate-related corporate reporting as reflected in the levels of voluntary carbon disclosure. Using a sample of S&P 500 companies from 2015 to 2020 across both environmentally sensitive and non-environmentally sensitive industries, we find that diverse ownership structures have distinct impacts and preferences in corporate carbon disclosure. Specifically, government ownership is likely to promote transparency of carbon information. In contrast, the ownership held by institutional investors (total, short-term, and long-term), managers (i.e. CEOs, directors), and block-holders are negatively associated with the proactive greenhouse gas disclosure. We also find evidence that climate governance quality plays a positive moderating role in the relationship between two ownership types (i.e. long-term institutional investors and block-holder) and a firm’s climate-related corporate reporting. Our findings offer some practical insights for managers, regulators, and policymakers to focus on the configuration of corporate ownership in the context of improving green practices.

SOEs' commitment to transparency: Voluntary disclosure as a driver of mandatory disclosure

AbstractNon‐compliance with transparency obligations among publicly owned enterprises has revealed the lack of coercive capacity of the legislation. In this context, literature suggests that mandatory disclosure becomes a matter of company willingness, but this has not been empirically tested so far. Drawing on Oliver's (1991) typology of organizational strategies and studies on normativity production, this study analyzes whether voluntary disclosure levels of financial and non‐financial information determine compliance with transparency legal requirements for the case of Andalusian state‐owned enterprises (SOEs) owned by local and regional governments. We have verified this question using linear regression analysis. The analysis proves that when transparency legislation lacks enforcement power, the level of voluntary disclosure determines the level of legal compliance. Both voluntary and mandatory disclosure levels are explained by the same determinants, suggesting that disclosure is determined by reasons of legitimacy and commitment to transparency. This contributes to the research lines on normativity and transparency in SOEs, being also relevant for lawmakers. This study provides evidence for Oliver's (1991) theoretical arguments about firms' strategies in the face of institutional pressures. It offers policy‐makers and SOE managers an insight into how prepared SOEs are to respond to the demands for greater transparency.

Voluntary Disclosure-Profitability Nexus: The Moderating Effect of Audit Quality

The study aims to explore the moderating effect of audit quality on the association between voluntary disclosure and profitability. The study sample consists of (34) industrial companies listed on the Amman Stock Exchange (ASE) during the period (2017-2021). To achieve the objectives of the study, the content analysis method has been used to measure the impact of voluntary disclosure by reviewing 32 items of voluntary disclosure. Several statistical methods that fit the objectives of the study are used as well. The results of the study show that there is a positive association between the voluntary disclosure level and the profitability of the company, and that the moderating variable of audit quality negatively affects the relationship between voluntary disclosure and the profitability of the company. Considering the aforesaid results, the study recommends making voluntary disclosure by the industrial companies listed on the "ASE" due to its role in enhancing the profitability of companies.

Board Size, Board Composition and Voluntary Disclosure: Evidence from Listed Manufacturing Firms in Nigeria

This study investigated the influence of board size and board composition on voluntary disclosure of quoted manufacturing firms in Nigeria from the period of 2015 to 2019. Thirty- three (33) were purposively selected for the purpose of this study. Information was produced from content analysis of yearly reports. Panel fixed effect model, correlation matrix and descriptive statistics were employed in the estimation. The estimation of the fixed effect model shows that size of the board and board composition have positive and significant connection on the level of voluntary disclosure evidenced by t-statistics = 10.524, p-value of 0.000 and 10.466, p-value is 0.000 respectively. However, the study concludes that board size and the composition of the board can affect the extent of voluntary disclosure positively. The study therefore recommends that the board should comprises of well experience, skilled, knowledgeable people who can govern the firm well. The firms should also guarantee that the number of experienced people in the board should be sufficient enough be able to provide the firm with more oversight. 

VOLUNTARY DISCLOSURE AND EQUITY FINANCING IN BRAZIL

The objective of this study was to verify whether, in the Brazilian market, voluntary disclosure is able to increase the amount of financing through issuance of equity, and conversely, to analyze if the amount of financing through equity increases firms’ voluntary disclosure level. It was made empirical research, using two multiple linear regression econometric models, we found the following results for the period studied (2010-2017): (i) the higher the level of voluntary disclosure, on average, the greater was the amount of equity financing of nonfinancial companies listed on the B3 (Brazilian Securities Exchange - Brasil Bolsa Balcão S.A.); and (ii) the greater the amount of equity financing, on average, the higher was the level of voluntary disclosure of nonfinancial companies listed on the B3. The relevance of this study, national and international, is to provide empirical evidence of the possibility of increasing the volume of financing through issuing shares by means of voluntary disclosure. Social implications, on the other hand, are the use of empirical results to help investors and regulators in decisions about the market's reaction to voluntary information.

Climate-related corporate reporting and cost of equity capital

Purpose This study aims to examine the reaction of stakeholders (i.e. capital providers) to climate-related corporate reporting. Climate-related corporate reporting is captured by the level of voluntary carbon disclosure, while the recognition and appreciation of capital providers are captured through the cost of equity capital (COE). Design/methodology/approach This study uses a sample including the 350 largest companies by market capitalization on the London Stock Exchange, UK (FTSE350) from 2015 to 2019. The authors use fixed-effects regression models to examine the effect of climate-related corporate reporting on the COE. Findings This study finds that voluntary carbon disclosure proxied by carbon disclosure score is negatively associated with COE. This suggests that firms’ superior quality disclosure of carbon information could contribute to a lower COE. This implies that the market and stakeholders positively appreciate the involvement in climate-related reporting by businesses. Originality/value The finding provides insights to regulators, investors and other stakeholders in terms of the positive economic implication of actively engaging in reducing climate change impact through voluntary carbon disclosure. These findings also motivate corporates to be proactively involved in climate-related reporting by extending the quality of carbon information disclosure.

Voluntary disclosure and firm value: Evidence from Indonesia

Climate change carries risks that need to be mitigated by all parties, including companies because it affects company value. Many studies find that voluntary disclosure positively affects firm value in developing countries. This study aims to examine the effect of voluntary disclosure (CSR and carbon disclosure on firm value) in the developing country of Indonesia. Researchers suspect that voluntary disclosure practice in developing countries is still low, so that investors respond negatively. To test the hypothesis using regression with a total of 72 observations from the energy sector companies. The results of the study show that voluntary disclosure has a negative effect on firm value. The level of voluntary disclosure in Indonesia is still low, just complying with government regulations, and it is still considered a cost that affects the firm’s value. The implication of this research is to encourage the government to immediately make regulations and concrete steps to mitigate the impact of climate change.

Impact of IFRS adoption on the disclosure of management forecasts by industry concentration

ABSTRACTWe aim to investigate the impact of the adoption of the International Financial Reporting Standards (IFRS) on a firm’s strategic voluntary disclosure decisions under different product market conditions. In the corporate world, firms tactically decide the level of voluntary disclosures considering their benefits, like resolving information asymmetry in the financial market, and costs, like providing proprietary information to their rivals. The adoption of IFRS has affected the demands in the financial market for complementary information, and therefore, it would affect the incentive to withhold corporate information in consideration of proprietary costs in the product market. Using a sample of Korean firms, we find that the likelihood of withholding management forecasts in concentrated industries is weaker in the post-IFRS adoption phase than in the pre-IFRS adoption phase. This is because there are greater demands for corporate disclosures for firms in concentrated industries in the post-IFRS adoption phase than earlier. Moreover, we find that the influence of IFRS on the decision of firms in concentrated industries to disclose management forecasts is significant only for firms with higher market power and higher financial leverage.

Measuring the Level of Voluntary Disclosure in Commercial Banks and its Effect on Improving Financial Performance: an Applied Study on Number of Commercial Banks in the Iraqi Stock Exchange

Purpose: The aim of this study is to know the impact of voluntary disclosure on the financial performance of Iraqi commercial banks. It is able to attract the largest number of investors, as the information and data contained in the financial reports no longer truly reflect its financial position.   Theoretical framework: Voluntary disclosure plays a pivotal role in reducing the cost of financial analysts obtaining the necessary information to build their predictions about profits and cash flows achieved in the future, and thus will contribute to rationalizing investors' decisions and thus improving the efficiency of financial markets.   Design/methodology/methodology: The study population consists of (15) commercial banks listed in the Iraqi Stock Exchange, and a ten-year time series has been selected and the period extends from (2010-2019), government and Islamic banks have been excluded due to the difference In the privacy of applicable regulations.   Find: The results of the study showed a positive and moral impact of voluntary disclosure on financial performance, while the effect of voluntary disclosure on the rate of return on assets and the rate of return on equity was also positive, while the effect of voluntary disclosure on earnings per share was negative, and in the end, the researcher recommended a set of recommendations Perhaps the most important of them is the need for intervention by bodies, unions and the government in order to put in place a set of instructions, controls, laws and legislations necessary to regulate the process of voluntary disclosure, while clarifying the advantages that can accrue to banks from this disclosure.   Research, practical and social implications: This study has dealt with the issue of voluntary disclosure in the academic and administrative fields, where the researcher hopes that the Iraqi banking sector and stakeholders will benefit from this study as it establishes, theoretically and practically, the logical connection of the relationship between voluntary disclosure and financial performance.   Originality/value: The study's originality value by measuring the impact of voluntary disclosure on the level of financial performance for the first time in Iraqi commercial banks for the period from (2010-2019) except for governmental and Islamic banks due to the difference in the specificity of the applicable regulations.

Users Perspective on Voluntary Disclosure of Takaful Policy Requirements in Malaysia

Takaful also known as Islamic insurance industry has been growing rapidly across the globe. The unique organizational structures of takaful operators, their products’ and participants’ rights have increased the demand for transparency and put additional pressure to voluntarily disclosed more information. This study focuses on disclosure of takaful information from user’s perspective. A checklist was developed to represent desirable level of disclosure based on various requirements and standards. To measure the voluntary disclosure level, the checklist was distributed to takaful agents to examine their perception of the disclosure on takaful information. The findings show that majority of the users (86.14%) agreed that all disclosure items on takaful policy requirements are meaningful. It is hoped that the findings will assist authorities in formulating guideline or policy pertaining to meaningful disclosure for the users in the future.

Level of voluntary disclosure and market value: An applied study on companies listed in Amman Stock Exchange

Voluntary disclosure is viewed as an essential communication tool through which the company's ideas can be promoted to potential stakeholders, which contributes to achieving the company's growth and sustainability. This study came to reveal the reality of voluntary disclosure in the Jordanian industrial companies and its impact on its market value. The descriptive-analytical approach was adopted, where content analysis of the financial reports published by 72 industrial companies listed on the Amman Stock Exchange during the period (2016-2022). The study found that the level of disclosure of non-financial items included the aspects of the board of directors, social responsibility, and community policy were high, which reached 56%, compared to the level of disclosure of financial items, which reached 43%. This indicates that companies pay more attention to disclosing non-financial items than financial items. In addition, the study indicated that companies with a high level of voluntary disclosure have a better market value compared to those companies that have not disclosed or have a lower level of disclosure. Moreover, increasing voluntary disclosure of strategic information, financial information, and non-financial information increases the market-to-book value, because voluntary disclosure enhances the information available to investors about shares, which in turn improves the market value.

Os fatores explicativos das divulgações relacionadas às taxas de desconto por entidades listadas em Portugal

ABSTRACT This paper aims to identify the explanatory factors of mandatory disclosure (MD) and voluntary disclosure (VD) levels related to discount rates, based on disclosure theories. The size, leverage, profitability, and audit firms were selected from different theories, namely agency theory, signaling theory, positive accounting theory, including the political cost hypothesis, and the cost of capital theory. Furthermore, the materiality (weight of the items) and the relevance (nature) of the topic were also considered, based on the evidence already obtained in the literature. Research on disclosures related to discount rates has been assessed either as an incidental topic or from a limited-scope analysis, particularly with respect to MDs. This paper assesses this topic as its specific object of analysis for both MD and VD. The use of the discount rate has been assuming growing importance within financial reporting. Therefore, this topic should deserve particular attention from international standard-setting bodies. The understanding of the proper set of items to be disclosed and understanding the factors that explain its disclosure, aligned with the efforts to assure its compliance by legal authorities, may contribute to reducing asymmetries and increasing transparency in entities' financial reporting. This study uses the method of archival research and content analysis of consolidated reports and accounts for the year 2020 of listed entities in Euronext Lisboa. Regression models were used, having disclosure indices related to discount rates as dependent variables. This paper finds a positive association between disclosures related to discount rates and the entity’s size, as well as the materiality and the relevance, assessed by the weight of the items and the nature of the topic under assessment, respectively. It adds new explanatory factors on the VDs and MDs related to discount rates in a broader perspective of analysis.

Online sustainability disclosure practices in the university context. The role of the board of directors

Purpose The study aims to examine the impact of corporate governance in terms of certain board characteristics on the level of universities’ voluntary sustainability disclosure. Design/methodology/approach A content analysis based on a comprehensive disclosure index – that also accounts for the impact that COVID-19 exerted on the social dimension of university activities – is performed on a sample of Italian public universities’ websites for the year 2020. An ordinary least squares regression model is estimated to test the association between universities’ board characteristics, namely, board size, board independence and board gender diversity (including the presence of a female rector), and online sustainability disclosure. Findings This study provides evidence that websites represent a valid tool used by universities to highlight their social performance and demonstrate their commitment to dealing with the pandemic’s social and economic disruption by supporting their stakeholders. Board gender diversity and female Rector’s presence are crucial factors that positively impact voluntary sustainability disclosure levels. Practical implications Policymakers and regulators can benefit from the study’s findings. Using the results of this study, they may reflect on the need to regulate sustainability reporting in universities. In addition, findings may offer policymakers inspiration for regulating the presence of women on university boards. Originality/value This study offers novel contributions to existing literature analysing the university’s voluntary sustainability disclosure practices through alternative communication tools such as websites. Moreover, it provides novel insight into the role of the board gender diversity in university sustainability disclosure practices.

Industry Competition, Corporate Governance, and Voluntary Disclosure of Greenhouse Gas Emissions Information: Evidence from South Korea

This study investigates the relationship between industry competition and managers' voluntary disclosure policies and examined how the corporate governance structure affects this relationship in South Korean companies. The fiercer the competition within the industry to which the company belongs, the higher the incentive for managers to perform strategic actions to improve their competition status. This increase in the strategic incentives of managers can be seen through voluntary disclosure policies. The empirical results of this study are as follows. First, it was found that there was a negative relationship between the degree of industry competition and the level of voluntary disclosure of greenhouse gas emissions information. This means that managers perform less disclosure to maximize the value of the company because the more competition within the industry intensifies, the higher the proprietary cost of disclosing information on greenhouse gas emissions information. Second, it was found that the corporate governance structure weakened the relationship between the degree of industry competition and the level of corporate voluntary disclosure. These results can be interpreted as that a good governance structure supports such managers' disclosure decisions because managers are more likely to choose disclosure policies to maximize the value of the company than personal benefits even in the fierce industry competition.

Political spending, related voluntary disclosure, and the cost of public debt

Following the Supreme Court decision in the Citizens United v. Federal Election Commission case of 2010, which removed restrictions in relation to firms’ political spending, and building on the growing debate over whether voluntary political spending disclosure (VPSD) provides valuable information, we examine the effect of political spending on the cost of public debt and the role of VPSD on this effect. Based on a measure of VPSD that became available in 2012 and a large dataset on US firms’ actual political spending, manually extracted from different filings, we provide novel evidence that, in the post-Supreme Court decision period, political spending increases the cost of public debt. This is consistent with the uncertainty associated with political spending. Moreover, we find that the level of voluntary disclosure weakens the positive association between political spending and the cost of public debt. These results hold across multiple specifications as well as when we use a sudden release of firms’ political spending as an exogenous shock to political spending.

Do effective audit committees, gender-diverse boards, and corruption controls influence the voluntary disclosures of Asian banks? The moderating role of directors’ experience

The study investigates whether effective audit committees, gender-diverse boards, and corruption controls affect the level of voluntary disclosures of Asian banks. Further, we analyze whether directors’ experience moderates the impact of audit committee independence, audit committee meetings, board gender diversity, and corruption controls on voluntary disclosures. We use data for commercial banks operating in six Asian countries, i.e., China, India, Pakistan, Malaysia, Hong Kong, and Singapore. For empirical analysis, we apply several robust statistical techniques. We find that commercial banks with effective audit committees, gender-diverse boards, and corruption controls tend to disclose less information voluntarily as they perceive limited benefits from optional disclosures. Further, we find unique evidence that directors’ experience significantly moderates the impact of audit committee independence, audit committee meetings, board gender diversity, and corruption controls on voluntary disclosures of Asian banks. Our unique findings are consistent with the proprietary cost theory. Further, our results indicate that commercial banks operating in countries that maintain rule of law, regulatory quality, and government effectiveness tend to disclose less information voluntarily.

The Analysis Of The Effect Of Firm Characteristics On The Completeness Of Public Company’s Voluntary Disclosure

The purpose of this study is to analyze the influence of firm characteristics and voluntary disclosure levels in the annual reports of listed companies in Indonesia Stock Exchange. The degree of voluntary disclosure is calculated by an index which is based on background information, non-financial statistic, projected information, and management discussion and analysis. This study using 434 companies in 2021 as a sample and applies the multiple regression analysis. The finding of this study shows that firm characteristics; profitability, firm size, liquidity and industry type have significant relationship with voluntary disclosure, while leverage, age and ownership have no significant with voluntary disclosure. This study can be very helpful for the shareholders, creditors and financial management in making decision about giving voluntary disclosure in annual reports as it provides adequate information for decision making. 
 Key Words: Voluntary disclosure, Firm characteristic, Annual report

Do Level of Audit Committee Independence and Types of Financial Expertise Affect Corporate Voluntary Disclosure: Evidence for an Emerging Economy

The aim of this study is report on the level of audit committee (AC) independence and different types of financial expertise and to empirically examine the effect of AC independence level and different types of AC financial expertise on corporate voluntary disclosure of Malaysian listed firms. Using multiple regression analysis on data drawn from annual reports of top 146 listed firms, the findings reveal that proportion of independent directors on audit committee, and totally independent audit committee members can lead to significantly a higher level of voluntary disclosure. Further, members with accounting expertise of AC are significantly associated with corporate voluntary disclosure. The findings of this study may be of interest to policy makers, regulators, shareholders and management as they could use them to understand and assess AC effectiveness and hence enhance the monitoring role of AC.

The Role of Voluntary Disclosure Content in Changing the Behavior of Stakeholders Towards Commercial Banks

The research focuses on the role of voluntary disclosure content in changing the behavior of stakeholders towards commercial banks in Erbil city. This was represented in the objective of this research to highlight the importance of the content of voluntary disclosure contained in financial reports and its role in changing the behavior of stakeholders towards banks, as well as highlighting the concept and importance of the behavior of stakeholders. The researchers used the analytical method to achieve the objective of the research and to test its hypotheses. To obtain and analyze research data using statistical programs, questionnaire forms were distributed to the research community, which consisted of employees of companies, the government sector and the ordinary citizen, and the applied random sampling method was relied upon in selecting the samples, which consisted of (73) valid forms for analysis. It is concluded that there is a significant correlation between voluntary disclosure and the behavior of stakeholders and that the more commercial banks rely on voluntary disclosure of the information they have, the more positively improved behavior of stakeholders towards the decisions they take. Therefore, the research recommends that commercial banks work on applying market research technology in order to identify the nature of information that contributes to improving levels of voluntary disclosure by them based on the needs that stakeholders deem appropriate for their aspirations when dealing with these banks.