Disclosure Quality Research Articles

Fund social network and MD&A disclosure quality

Fund social network and MD&A disclosure quality

Can corporate site visits by institutional investors improve the quality of corporate environmental information disclosure? Evidence from China

Can corporate site visits by institutional investors improve the quality of corporate environmental information disclosure? Evidence from China

The new Securities Law, information disclosure quality and corporate innovation

The new Securities Law, information disclosure quality and corporate innovation

The impact of environmental information disclosure quality on corporate value: The mediating role of innovation investment

The impact of environmental information disclosure quality on corporate value: The mediating role of innovation investment

The Impact of Regulatory Inquiries on the Content Quality of Corporate IPO Disclosure - A Case Study of HyperStrong

The registration system is a fundamental system for China's capital market, which has been widely recognized by academics and regulators, followed by a positive response from the SSE STAR Market. Based on the backdrop of the registration system, this paper takes the company prospectus and inquiry letter as the research object. It selects the case study of Beijing HyperStrong Technology Co., Ltd., which has gone through two rounds of inquiry and has been successfully listed. First, this paper describes the research background and significance of the regulatory inquiries under the SSE STAR Market registration system. It analyzes the current status of research at home and abroad. Secondly, it introduces the basic situation of the case companies. Then, the percentage of various questions and concerns of the SSE's two rounds of questioning of the case companies are analyzed respectively. Finally, the impact of SSE's regulatory inquiries on the disclosure quality of the case companies is analyzed in terms of adequacy, consistency, and comprehensibility. The study shows that regulatory inquiries have significantly improved adequacy, consistency, and comprehensibility in the prospectuses of proposed listed companies, effectively optimizing the quality of initial prospectuses. As a result, proposed listed companies should respond to trading inquiries promptly, maintain consistency in information disclosure, and comprehensively consider risk factors to enhance trust between companies and investors. Currently, there are fewer case studies of regulatory inquiries under China's registration system, and this paper provides a case study of regulatory inquiries, which can enable issuers to understand better the concerns and significance of regulatory inquiries by regulators for IPOs.

Does competitive position matter: Investigating the impact of information risk on COE and corporate investment.

The purpose of this study is to find out how firm's competitive position plays the moderating role between the relation of information risk and COE. The study considers the effect of two different types of information risk, i.e., lack of information quality and transparent information. The data of the study is collected from all the non-financial firms listed on PSX from 2007 to 2022. Two-step system GMM dynamic panel estimators are applied to test the dynamic nature of the proposed model. The findings show that firms having better competitive position signal their strength through improved information disclosure in order to gain the confidence of shareholders. This competitive environment poses a governance effect by imposing discipline on manager's behavior, reducing information asymmetry and improving the quality of information disclosure, resulting in reduction of the COE. Further, a more competitive environment improves the readability of the annual report and reduces information asymmetry. In addition, by reducing financing frictions, this research provides new and unique insights pertaining to the importance of competitive position in the sensitivity of investment to information risk. This research extends to the corpus of literature by investigating the unexplored strategic determinants, such as a firm's competitive position, to mitigate the impact of two distinct types of information risk: lower quality and reduced transparency. Additionally, it explores how these risks influence both the cost of equity and corporate investment.

The Suppressing Role of Market Liquidity: Unpacking the Complexity in the Carbon Disclosure Value Creation Pathway

This study explores the nuanced role of market liquidity (TR) as a suppressor in the relationship between Carbon Disclosure Quality (CDI) and Enterprise Value Creation (VL). Drawing on signaling theory and stakeholder theory, the research employs Structural Equation Modeling (SEM) based on dual-source data from 277 listed firms in high-emission industries in China. While CDI demonstrates a direct positive impact on VL and exhibits significant mediation through financing cost, customer satisfaction, and corporate reputation, market liquidity reveals a unique suppressing effect. Specifically, the SEM results indicate that CDI has a significant positive effect on enterprise value creation (β = 0.32, p < 0.01), whereas market liquidity exerts a suppressing indirect effect (β = –0.06, p < 0.05). These effects are validated using Bootstrap resampling (n = 10,000), and model fit indices confirm strong validity (CFI = 0.978; TLI = 0.967; RMSEA = 0.038). The findings highlight the potential for carbon disclosure to generate ambiguous signals in transitional ESG environments, complicating investor interpretation and value realization. This study contributes to the ESG literature by identifying a novel suppressor variable and offers strategic recommendations to enhance the clarity and effectiveness of ESG communication and carbon disclosure practices.

The dark side of intangibles? Organizational capital and corporate investment efficiency

PurposeOrganizational capital (OK) represents an important intangible productive firm asset, yet one subject to agency problems. This paper provides a first examination of how OK impacts corporate investment inefficiency using an unbalanced panel of listed US companies from 2009 to 2020.Design/methodology/approachWe utilize fixed-effect regressions to explore the relationship between OK and investment efficiency. Additionally, we implement a battery of robustness tests of the main study findings based on a variety of panel data techniques, including firm fixed effects, alternative measures of investment efficiency, estimators, including Newey–West as well as additional steps to address endogeneity concerns using system-GMM, two-stage least-squares and entropy balancing analyses.FindingsOK is associated with reduced investment efficiency (underinvestment and overinvestment). A one-standard deviation increase in OK to total assets is associated with a 4.42% decrease in investment efficiency. Based on average firm investment, this represents a $390.88 million decrease in investment. CEO gender and career concerns as well as R&D intensity, positively moderate this relationship, while CEOs’ age, power, tenure and connections as well as corporate governance and disclosure quality, negatively moderate it. The findings can be understood from the perspective of agency theory, whereby informational asymmetries surrounding OK make it challenging for firm outsiders to monitor and evaluate managerial investment choices.Originality/valueWe lack understanding as to how it impacts the efficiency of corporate investment. We contribute the first evidence in this regard by demonstrating that OK is associated with lower investment efficiency.

Human Capital to Implement Corporate Sustainability Business Strategies for Common Good

The International Financial Reporting Standards (IFRS, 2023) guidelines have indicated the importance of holistic organisational sustainability values (profit, people, and planet) and the required human capital to implement sustainability business strategies to achieve sustainable development goals (SDGs). This empirical research using the strategic choice and sustainable human resource management resource-based theories explores the role of high-performance sustainable work practices (HPSWPs) with sustainability characteristics to shape the required human capital to implement simultaneous environmental, social, and governance (ESG) corporate sustainability business strategies aligned with the organisational sustainability orientation of firms. A total of 203 senior managers from Australian companies participated in this study. The participants completed survey questionnaires, which encompass the holistic organisational sustainability orientation, corporate sustainability business strategy, and high-performance sustainable work practices. The mediation study findings revealed that the social consciousness, stakeholder compassion, ethics of care for wellbeing, and pro-environment characteristics of high-performance sustainable work practices fully mediate the implementation of ESG corporate sustainability business strategies that are aligned with the holistic organisational sustainability orientation. This exploratory research extends the operational strategic choice theory from the sustainable human resource management resource-based perspective in highlighting the role of high-performance sustainable work practices in implementing the choice of environmental, social, and governance (financial) business strategies. Furthermore, the practical implications include improving the quality of voluntary sustainability disclosure by companies in alignment with the IFRS guidelines on management approaches relating to human resource practices to shape the required human capital with sustainability characteristics for corporate sustainability. Future empirical research directions in operationalising simultaneous ESG corporate sustainability business strategies using high-performance sustainable work practices aligned with the holistic sustainability orientation of firms are discussed.

Signal or pressure? Retail investor attention and MD&A quality

PurposeThis study examines the impact of retail investor attention on the quality of management discussion and analysis (MD&A) sections in the annual reports of A-share main board companies listed in China, framed within the context of limited attention theory.Design/methodology/approachThis study analyzes textual data from the MD&A sections of annual reports and interaction data from the investor-firm interaction platforms of the Shanghai and Shenzhen Stock Exchanges in China, covering 2015–2019. It applies the Continuous Bag of Words (CBOW) model and t-SNE dimensionality reduction technique to construct an indicator for MD&A information content. Additionally, the study assesses the moderating effects of factors, including state ownership, media coverage, regulatory inquiry letters and economic policy uncertainty, on the relationship between retail investor attention and MD&A quality.FindingsThe results show that retail investor attention significantly enhances MD&A quality, primarily through the mechanism of signal transmission. This relationship is moderated by factors including state ownership, media coverage, regulatory inquiry letters and economic policy uncertainty. Moreover, the study indicates that the positive impact of retail investor attention on MD&A quality significantly reduces the risk of stock price crashes and improves firm performance.Originality/valueThis study contributes to the literature by providing new insights into the role of retail investor attention in enhancing MD&A disclosure quality, highlighting retail investors as an informal monitoring mechanism that supports capital market stability. It addresses a gap by incorporating limited attention theory into the analysis of retail investor attention and MD&A quality and introduces an innovative approach to measure MD&A information content. The findings offer valuable implications for improving disclosure practices among listed companies.

Effect of Corporate Social Responsibility on Financial Performance in Asian Firms - A Historical Empirical Analysis

Aims: This study aims to examine whether corporate social responsibility (CSR) has a positive influence on a firm’s financial performance in Asian emerging markets. Specifically, it investigates the relationship between CSR and two financial performance indicators: market valuation (Tobin’s Q) and operating performance (ROA). Study Design: This is a quantitative cross-sectional study using regression-based statistical modeling to evaluate CSR’s impact on financial outcomes. Place and Duration of Study: The study analyzes secondary data from 50 companies across 11 Asian countries, using fiscal year 2009 reports evaluated by Credit Lyonnais Securities Asia (CLSA). Methodology: CSR scores (1–5) were assigned by CLSA based on five dimensions: environmental impact, social impact, governance, transparency, and disclosure quality. Financial data, including Tobin’s Q and ROA, were collected from COMPUSTAT. Regression models were used to test the direct effect of CSR on financial performance and the moderating effect of country-level corporate governance on the effect of CSR on Tobin’s Q and ROA. Control variables included corporate governance score, firm size (log sales), debt-to-equity ratio, and sales growth. Results: CSR scores were found to be significantly and positively associated with both Tobin’s Q (β = 0.21, P = .05) and ROA (β = 0.02, P = .05). This means that the integration of CSR into enterprises’ activities can bring substantial benefits for their market valuation and operating performance. The interaction between CSR and country-level corporate governance was not statistically significant, indicating no moderating effect and implying that CSR effectiveness are not affected by institutional distance between countries.

Economic Performance Disclosure Practices as per Gri-G4 Guidelines -A Case Study of Indian Oil Corporation

Objective: To examine the disclosure practices of economic performance by the Indian Oil Corporation (IOC) and evaluate its alignment with global reporting standards, particularly the Global Reporting Initiative (GRI) guidelines. Methodology: The study employs a case study approach, using secondary data from IOC's reports and publicly available documents. to assess the extent and quality of economic performance disclosures in alignment with GRI guideline content analysis techniques were applied. Findings: The analysis reveals that the Indian Oil Corporation has progressively improved its economic performance reporting practices, adhering to GRI standards. However, gaps remain, indicating scope for further adoption and compliance with integrated reporting frameworks. Practical Implications: The findings underscore the need for organizations in environmentally sensitive sectors, such as oil and gas, to enhance transparency in both financial and non-financial disclosures. This can enable stakeholders to better evaluate the organization’s socioeconomic and sustainability contributions, fostering accountability and informed decision-making. Originality/value: This study contributes to the limited literature on integrated reporting practices in emerging economies, particularly within the Indian energy sector. It offers pragmatic understanding into how a major public-sector enterprise navigates evolving stakeholder expectations, emphasising the growing relevance of non-financial disclosures alongside traditional financial metrics. Paper type: Case Study

Risk Disclosure Quality Assessment Using Hidden Markov Chain Analysis of Firms' Risk State

Risk Disclosure Quality Assessment Using Hidden Markov Chain Analysis of Firms' Risk State

Information Disclosure in the Context of Combating Climate Change: Evidence from the Chinese Natural Gas Industry

Natural gas (NG) is a key transitional energy source for clean energy transition. Against the backdrop of a grim climate change situation, the sustainable development of the Chinese NG industry is emphasized. Climate change disclosure (CCD) has become an important way for corporations to fulfill their social responsibility and demonstrate their capacity for sustainable development. In order to understand the current status of CCD in the Chinese NG industry and to improve the deficiencies, this paper assesses the quality of CCD in the Chinese NG industry. Climate change information is not fully covered by the existing quality evaluation systems. This study establishes a highly applicable system for evaluating the quality of CCD based on the theory pillar perspective. It includes the following five dimensions: completeness, balance, reliability, comparability, and understandability. This study evaluates the quality of CCD of 58 NG corporations using content analysis and quality evaluation index methods, incorporating Skip-Gram and CRITIC models. The evaluation results indicate that the quality of climate reports in the Chinese NG industry has shown general improvement over time; however, inconsistencies remain, making comparisons challenging. There are differences in the level of quality of CCD in the Chinese NG industry. Policy incentives with clear guidance and regional economic development conditions have a notable impact on the quality of CCD. For Chinese NG corporations themselves, disclosing climate change information related to risk management is the focus of narrowing the reporting gap. The CCD quality evaluation system constructed in this paper provides a theoretical reference for all industries to accurately promote disclosure quality. It also provides practical guidelines for corporations to identify weak links in CCD.

Advancing Environmental Information Transparency through Country-Level Governance on ASEAN

Sustainability issues have become a much-debated topic in the last few decades. This is due to significant events, such as the explosion of the Deepwater Horizon oil rig explosion, that have had devastating impacts on the environment. Country-level governance plays a significant role in encouraging environmental information disclosure. Companies that provide environmental information: better county-level governance almost certainly leads to a higher quality of corporate disclosure on the environment. This study reviews to investigate the meaning behind corporate reporting and why there is a need for governmental support to facilitate environmental efforts. As for the environmental information disclosure, it is made through a sustainability report. We measured country-level governance using The World Bank's World Governance Indicators (WGI), which comprises six indicators: Voice and Accountability, government effectiveness, political stability and absence of violence/terrorism¬, regulatory quality, the rule of law, and Control of corruption. Methodology This study tactics on a literature review based approach, where the information obtained from different written sources connected to this topic are collected and analyzed. These results tell us that in the ASEAN region, Singapore comes out on top for government effectiveness, political stability and absence of violence/terrorism, regulatory quality governance control of corruption rule of law and Timor Leste scored highest on the voice and accountability indicators. Myanmar, meanwhile, achieved the lowest country-level governance score.

Green Finance Policies and Corporate Biodiversity Disclosure: Evidence from China

This study examines the impact of green finance policies on corporate biodiversity disclosures, focusing on China’s Green Finance Reform and Innovation Pilot Zones (GFPZs). Utilizing a comprehensive dataset of Chinese-listed firms from 2010 to 2022, we apply textual analysis to annual reports to quantify biodiversity-related disclosures. Our findings reveal that GFPZ policies significantly reduce biodiversity disclosures, suggesting a trade-off between carbon-focused financial incentives and broader environmental transparency. Cross-sectional analysis indicates that firms with higher R&D intensity and those in regions with stricter environmental enforcement exhibit fewer negative effects. Mechanism analysis highlights that carbon production intensity and green information disclosure quality mediate this relationship. Robustness checks, including propensity score matching, confirm these results. Our study underscores the need for policymakers to integrate biodiversity considerations into green finance frameworks to ensure balanced ESG priorities.

Legitimization Tools or Governance Tools? A Systematic Literature Review of Corporate Governance and Carbon Disclosure Quality

ABSTRACTAs global climate challenges intensify, corporate carbon disclosure quality (CDQ) has emerged as a vital indicator of corporate environmental transparency and accountability. However, corporate governance (CG) mechanisms remain contested: are they primarily legitimation tools to meet external expectations or governance instruments to ensure substantive environmental performance? This study conducts a systematic literature review (SLR) utilizing the PRISMA framework, methodically screening and synthesizing 64 studies published between 2011 and 2024. Key findings encompass (1) Persistent suboptimal CDQ across both developed and emerging markets; (2) A trend towards theoretical integration, with the CG‐CDQ relationship increasingly reflecting the interplay of multiple theoretical frameworks; (3) Dynamic duality of CG's role, wherein its primary function depends on institutional pressure, governance architecture, and stakeholder oversight; (4) Bridging institutional voids in emerging economies, as demonstrated by China's state‐owned enterprises (SOEs) surpassing non‐state‐owned firms under policy incentives. This study also identifies critical research gaps: over two‐thirds of CG‐CDQ studies concentrate on the US, Europe, and China, while ASEAN and Africa—carbon‐intensive regions—remain underexplored, constituting a 90% research void. The cultural dimension is frequently neglected, with only one study examining informal institutions, such as Confucianism. These findings highlight that governments should mandate carbon disclosure standards, implement cross‐border accreditation mechanisms, and enhance social oversight; corporations should bolster governance, incorporate environmental expertise, and ensure that 30% of their executives are female; and investors should advocate for ESG performance agreements that correlate carbon disclosure with investment returns, fostering sustainable development.

The Value Relevance of Business Model Disclosure Quality in Integrated Reports

Purpose: Despite the vast array of literature on integrated reporting, there is scant empirical evidence on the value relevance of the specific content elements of integrated reports. This paper investigates whether a specific content element of integrated reports, namely, business model disclosure quality influences the share price of South African listed companies. Business model disclosure was selected because it is integral to all stakeholders in understanding companies’ value creation processes to make informed decisions. Design/Methodology/Approach: The value relevance was tested using the Ohlson (1995) Model through the application of panel data. A new proxy was used for the “other information” variable in the Ohlson (1995) Model for business model disclosure. Two scenarios were evaluated: one sample included profit-making and loss-making companies (350 observations) and another sample of profit-making companies (260 observations) for five years from 2016 to 2020. Findings: The results for both scenarios indicated that the quality of business model disclosure had no effect on the share price of South African listed companies. Originality/Value: The paper makes four contributions to the existing literature. Firstly, analysing the value relevance of one specific component of integrated reports, namely, business model disclosure. Secondly, using a new a proxy for business model disclosure to incorporate into the Ohlson (1995) Model. Thirdly, the paper provides empirical evidence on the value relevance of one of the critical elements of integrated reports of companies that have a mandatory requirement to publish integrated reports. Fourthly, two samples were analyzed: one sample of profit-making and loss-making companies and another sample of profit-making companies.

The nexus of carbon disclosure and green technology innovation: An empirical analysis based on Chinese listed companies.

The nexus of carbon disclosure and green technology innovation: An empirical analysis based on Chinese listed companies.

Creditor governance and mandatory information disclosure quality

Creditor governance and mandatory information disclosure quality