Voluntary Information Disclosure Research Articles

Platform Information Transparency and Effects on Third‐Party Suppliers and Offline Retailers

We examine a model in which a supplier sells products through an online platform and an offline retailer under conditions of demand uncertainty. The actual demand potential can be observed (or predicted accurately using rich sales data) by the platform and retailer, but not by the supplier. The model addresses the following issues. First, the supplier optimizes its multi‐channel strategy, including a selling format choice in the online channel and optimal pricing. Specifically, although a traditional wholesale model is used offline, both wholesale and agency models are prepared online. Given a commission rate set by the platform for the agency model, the supplier chooses one selling format from the two models. The second one is related to the platform's information‐sharing policy. The platform can commit to sharing its demand information with the supplier. This study elucidates how the platform's information sharing alters the supplier's multi‐channel management and subsequently affects the retailer eventually. Results show that the platform charges its commission rate so that the supplier chooses the agency model, unless the consumer demand is sufficiently uncertain. We also demonstrate that the platform's information sharing capability makes the agency model more likely to be adopted. However, information transparency arising from the platform's voluntary information disclosure can be unfavorable to the retailer. Finally, we demonstrate that, with information sharing, a shift from wholesale to agency models can be desirable not only for the platform and supplier, but also for the retailer (i.e., Pareto‐improving).

Bargaining with voluntary transmission of private information: An experimental analysis of final offer arbitration

In Final Offer Arbitration, both parties submit a proposal to an arbitrator. In the event the parties cannot reach a negotiated settlement, the arbitrator chooses the submitted proposal that is closest to her preferred settlement. In such a model, asymmetric information can lead to costly bargaining failure. Voluntary disclosure of private information has the potential to eliminate disputes which would otherwise arise. However, the timing of this information transmission is crucial, because information can be used by the previously uninformed party to submit a superior proposal to the arbitrator. Thus, there is an incentive to conceal information if it is to be revealed prior to the submission of proposals to the arbitrator. However, information transmission should occur if it takes place after the submission of these proposals. In this paper, we test this theory experimentally and find individuals with a strong case reveal their private information in 40% of negotiations when revelation comes prior to the submission of proposals and in 60% of negotiations when revelation comes after the submission of these proposals. Moreover, information disclosure by a party with favorable information increases the rate of settlement as predicted by the theory.

PERAN INFORMASI MODAL INTELEKTUAL SEBAGAI VARIABEL MODERASI PADA HUBUNGAN ANTARA MODAL INTELEKTUAL DAN NILAI PERUSAHAAN

This paper empirically examines whether type of intellectual capital (IC) information affect market value of the firm. This paper also examines whether voluntary disclosure of intellectual capital information will strengthen the affect of intellectual capital information to market value of the firm. The samples were the banking industry firm listed on the Indonesia Stock Exchange from 2017-2019. The variable of type of IC information measured by Intellectual Capital Disclosure Index (ICDI) by modifying the approach of García-Meca and Martínez (2007). The study finds that IC positively effect on market value of the firms. Moreover, this study finds that IC information-especially voluntary disclosure also strengthen (as moderating variable) the IC effect on firm value.

Do Foreign Investors Affect Carbon Emission Disclosure? Evidence from South Korea.

The purpose of this study is to examine the relationship between foreign investors and voluntary disclosure. Focusing on voluntary disclosure of carbon emissions information and using South Korean firms from 2014 to 2019, we found that foreign investors are likely to voluntarily release information on carbon emissions. Thus, foreign investors play a role in controlling the information gap in a capital market. We also discuss the effect of environmental, social, and governance activities on the relationship between foreign investors and voluntary disclosure. We infer that the analysis result shows that foreign investors motivate firms to improve the environment to prepare for future environmental risks. Our study also suggests solving environmental problems actively, such as responding to climate change, by presenting a direction for policymaking on sustainable management.

Economic policy uncertainty and stock liquidity: The mitigating effect of information disclosure

We examine the relationship between economic policy uncertainty, information disclosure and stock liquidity using a large sample of Chinese firms. We first establish that economic policy uncertainty leads to declining stock liquidity. Next, we provide evidence that managers respond to uncertainty shocks to their firm’s information environment by producing more information. Cross-sectional tests indicate that voluntary information disclosure increases more for firms with higher external information demand and with no implicit guarantees. Furthermore, we find that high information disclosure quality mitigates the negative impact of heightened economic policy uncertainty on stock liquidity. This impact is more pronounced for firms with poor information environments and private firms. Additionally, we provide further evidence using cumulative abnormal returns that in periods of high economic policy uncertainty, investors react more to management earnings announcements for firms with high information disclosure quality. Finally, we uncover that increased information disclosure quality improves financial analysts forecast precision more when policy uncertainty is high.

Disclosure, competition, and learning from asset prices

We study voluntary information disclosure by oligopoly firms in a setting in which firms learn information from asset prices to guide their production decisions. A firm that discloses information risks losing a competitive advantage over its rivals but may benefit from learning valuable information from a more informative asset market. Considering the financial market helps the product market escape a nondisclosure equilibrium with low total surplus. Firms' disclosure decisions can exhibit strategic complementarity, leading to multiple equilibria. Firms' endogenous disclosure behavior also gives rise to two novel comparative statics: fiercer competition in the product market can reduce consumer and total surplus, and increased noise trading in the financial market can improve price informativeness.

Deposit Supply and Bank Transparency

Does a bank’s dependence on different external funding sources shape its voluntary disclosure of information? We evaluate whether economic shocks that increase the supply of bank deposits alter the cost–benefit calculations of bank managers concerning voluntary information disclosure. We measure information disclosure using 10-K filings, 8-K filings, and earnings guidance. As for the funding shock, we use unanticipated technological innovations that triggered shale development and booms in bank deposits. Further analyses suggest that greater exposure to shale development reduced information disclosure by relaxing the incentives for managers to disclose information to attract funds from external capital markets. This paper was accepted by Kay Giesecke, finance.

Meeting Halfway? an Instrumental Approach of Family Firms’ Voluntary Information Disclosure

Whether and how family firms overcome public perception bias due to the perceived asymmetric treatment between family and nonfamily interests is under heated debate. Drawing insights from the instrumental stakeholder theory and the literature of voluntary disclosures, we propose family firms can overcome this bias by utilizing instrumental voluntary disclosure. Specifically, we distinguish between the intensity of information disclosure and the contents of information disclosed and develop the arguments in the context of voluntary information disclosure of newly established foreign subsidiaries. We posit that voluntarily disclosing more information can signal professionalization and alleviates concerns associated with family involvements. Disclosing information insensitive to socioemotional wealth, on the other hand, allows family firms to protect the core interests of the controlling families. We also highlight that the perceived salience of investor protection and family value protection in the host countries serves as important boundary conditions. We find support for our argument in a hand-collected sample of 425 newly established foreign subsidiaries from 283 Chinese publicly listed family firms from 2010 to 2017. Evidence from post-hoc analyses of foreign subsidiary survival and qualitative evidence further strengthens our arguments. We contribute to the literature of family business, voluntary disclosures, and the stakeholder theory.

Too Good to Be True: Impression Management and Integrity's Self-Governing Mechanism in M&As

In this paper, we study the influence of corporate culture (i.e., integrity) on impression management around M&As. Building on prior M&A literature, we argue that M&As provide a setting in which managers are prone to follow managerial self-interests and make use of impression management. Using a sample of 2,269 M&A transactions from S&P 500 firms between 2003 and 2018, we provide evidence that higher levels of integrity limit managerial use of impression management (i.e., manipulative disclosure behavior) during M&A announcements. We find an even stronger relationship in contextual situations that increase the risk of managerial self-interests in M&As. Our evidence suggests that integrity limits the risk of managerial self-interests in situations with high managerial discretion. We conclude that integrity acts as a self-governing function in situations that are hard to monitor by traditional governance mechanisms. Our study enriches prior research on impression management and voluntary information disclosure around M&A announcements with a perspective on the cultural value of integrity.

The Relationship between Corporate Governance and Voluntary Disclosure: The Role of Boards of Directors and Audit Committees

The objective of the present research is to examine the relationship between corporate governance and voluntary disclosure, and to determine how certain factors enhance governance practices and consequently increase voluntary disclosure. The study considers the content analysis of 22 Saudi listed companies from 2015 to 2019. A comprehensive index is developed, with a check-list covering 30 items to extract and measure corporate governance practices and levels of voluntary disclosure. The researchers use ordinary least squares (OLS) regression to examine whether corporate governance-specific mechanisms can explain any differences in voluntary disclosure levels among the listed companies. The results indicate a statistically significant relationship between the number of non-executive directors and board size and the level of voluntary disclosure. This study concluded that non-executive directors and board size are ranked the highest in terms of their positive effects on voluntary disclosure. The relationship between the independent directors and audit committees and voluntary disclosure is insignificant. The results suggest that the high number of non-executive directors and the increase in the number of directors on the boards lead to greater voluntary disclosure of information. This study helps regulators of corporate governance and company directors understand the factors affecting voluntary disclosure. Corporate governance regulators should require an increase in the minimum number of boards and non-executive directors for listed companies in order to gain the desired levels of voluntary disclosure and transparency. Saudi listed companies are advised to willingly increase their board members to the maximum number specified by regulation. This study has some limitations as participants represented a small sample; hence, the results cannot be generalised. Furthermore, the voluntary disclosure data were collected only from annual reports; sources such as websites, public announcements and press releases, were not taken into account, but would have provided many relevant details.

Voluntary Reporting in Decarbonizing Container Shipping: The Clean Cargo Case

Led by the UN’s International Maritime Organization (IMO) and the EU, the shipping industry struggles to reduce its greenhouse gas (GHG) emissions to align with the Paris Agreement. Clean Cargo, the leading voluntary buyer–supplier forum for sustainability in the cargo shipping industry, developed some years ago a methodology to calculate and report the GHG emissions from containerships. The recently introduced carbon emission requirements by the IMO and EU have reinforced the members’ interest in a new Clean Cargo reporting mechanism that enables a more effective and efficient monitoring of the decarbonization progress. A better understanding of the user needs accompanied by due consideration to the regulatory environment and the technological advances are key to build this new framework. This paper builds on the case of the Clean Cargo initiative to (1) identify the stakeholders’ expectations and motivations for voluntary disclosure of environmental information, and (2) discuss the governance challenges of voluntary initiatives. A questionnaire was designed and deployed to investigate the current uses of Clean Cargo data and the information sharing among different stakeholders. Voluntary schemes can speed up the decarbonization process by proposing standards accepted by all actors of the global value chain. Clean Cargo members envision reporting on absolute GHG emissions per shipment as the way forward.

Corporate ethical behavior and the cost of equity capital: evidence from the world’s most ethical companies

PurposeThis paper aims to examine the effect of the corporate ethical approach on the cost of equity capital. This study is conducted on a large international sample on behalf of the world’s most engaged firms from an ethical point of view in 2015.Design/methodology/approachThe multivariate linear regression model is used to meet the purpose of this study and research hypotheses are also examined using a sample of 80 of most ethical firms in the world during the year 2015. Moreover, three variables (i.e. business ethics, corporate social responsibility and executive compensation based on the achievement of sustainable development goals) are used to reflect the corporate ethical approach and the implied cost of equity capital is used for estimating the cost of equity. In this regard, equity cost estimation is the most appropriate approach to test the effect of business ethics on the cost of financing firms.FindingsBased on a sample of 80 firms emerging as the world’s most ethical firms in 2015, the results revealed that firms with better ethics scores are significantly associated with a reduced cost of equity capital. This paper also demonstrates that the executive incentive pays that are based on the objectives of sustainable development are able to explain different outcomes regarding the relation between corporate ethical behaviors and the cost of equity. These findings support arguments in the literature that firms with socially responsible practices have a higher valuation and lower risk.Originality/valueThis study provides implications for global regulators and policymakers when setting social reporting standards, suggesting that corporate ethical engagement reduces the cost of equity capital by decreasing the information asymmetry and thereby reducing the firms’ risk. Therefore, the findings may be informative to international managers and investors when considering the effect of business ethics on the firm’s ex-ante cost of equity. In this perspective, the voluntary disclosure of information makes it possible to mitigate the problems of asymmetry of information and conflict of interest between the firm and its main providers of capital, which could reduce the cost of equity.

A study of self-disclosure during the Coronavirus pandemic

We study observed incidence of self-disclosure in a large set of tweets representing user-led English-language conversation about the Coronavirus pandemic. Using an unsupervised approach to detect voluntary disclosure of personal information, we provide early evidence that situational factors surrounding the Coronavirus pandemic may impact individuals’ privacy calculus. Text analyses reveal topical shift toward supportiveness and support-seeking in self-disclosing conversation on Twitter. We run a comparable analysis of tweets from Hurricane Harvey to provide context for observed effects and suggest opportunities for further study.

Intended and unintended consequences of salient nutrition labels

AbstractProfit maximizing firms sometimes engage in voluntary informative advertising, usually to promote their reputation as honest brokers. One example of informative advertising is shelf nutrition labels that some supermarket chains voluntarily provide. Several studies have shown that voluntary shelf nutrition and similar front‐of‐pack nutrition labels positively influence food purchasing patterns. Yet these studies assumed that suppliers are price takers. Using one shelf nutrition label, NuVal, as an example, we revisit this assumption. We take advantage of the natural experiment that occurred when NuVal substantially changed its underlying scoring algorithm. As the NuVal label represents an independent expert assessment of the health quality of each food product, this natural experiment allows for testing the causal effect of the information on demand and price changes independent of the hype that comes with the rollout of a new information policy. After endogenizing prices, we find that price changes offset nearly 42% of the direct effects of the score changes. This result shows the potential benefits of this form of voluntary information disclosure but also that most previous analyses of nutrition labeling overstated the benefits because they failed to account for supply responses.

Disclosure of Non-Current Tangible Assets Information in Private Sector Entities Financial Statements: The Case of Lithuania

The research aims to examine and evaluate the accounting information disclosure (AID) quality of the non-current tangible assets in the annual financial statements of private sector entities of Lithuania and identify characteristics of these enterprises that have an impact on the AID quality. The research model of the AID quality in the financial statements is created. Based on the national accounting standards’ legal requirements, the original checklists were structured, and the disclosure quality indexes (DQIs) allowing evaluation of AID (both mandatory and voluntary) quality were formed. The empirical results show that Lithuanian enterprises’ AID quality was sufficient and average during the investigation period. The significant AID quality change was not observed during the short term (2007–2008), i.e., when Lithuania was going through a significant change in the economy, where the rapid growth was followed by the financial crisis. In addition, it was investigated whether significant changes were observed during the long term (2007–2016) when Lithuania was transforming from a developing to a developed country. The results show that during this period the disclosure of mandatory (for all enterprises) and voluntary information did not change significantly, while additional (for large and medium) AID quality increased. Multiple panel regression analysis showed that the enterprise’s characteristics (such as its size, debt-paying capacity, indebtedness, tangible assets, and profitability) appeared to have a statistically significant effect on the AID quality. The research findings could contribute to helping shareholders, potential investors or creditors, financial analysts, and other stakeholders when making decisions in regard to the evaluation of the AID quality as well as helping regulators to increase standards for information transparency and comparability.

Measuring the Level of Voluntary Disclosure of Information in the Published Annual Financial Reports of Iraqi Banks

The accounting profession has witnessed a qualitative transformation in the last three decades in light of scientific and technical developments, So that it has become an integrated and comprehensive information system that serves all activities and businesses in various sectors, This is where the accounting disclosure has become an essential and effective means in the media and reporting of the outputs of the accounting system and their delivery to all users in the administration, investors and stakeholders, In a way that enhances their ability to make appropriate decisions, to the qualitative transformation that has occurred in the accounting profession, In exchange for the mandatory disclosure concerned with providing the minimum amount of accounting information as determined by the legal frameworks and professional standards, The voluntary disclosure has emerged as a trend that some banks take to disclose the largest amount of information that goes beyond the limits of what they are obligated to do in order to serve the users of financial statements, This, in turn, drew the researchers' attention to conduct many studies and researches concerned with measuring the level of voluntary disclosure in banks. And its role in serving and achieving its strategic objectives, And its role in serving and achieving its strategic objectives, and the problem of the current research is to measure the level of voluntary disclosure of information in the published annual financial reports of Iraqi banks listed on the Iraq Stock Exchange, This is done by developing a tool to measure the level of voluntary disclosure of information in the published annual financial reports In addition, the results of the study showed that the voluntary disclosure of public information about banks comes in first place with a rate of (84.6%). This is followed by management discussions and analysis of business data (83.8%), And then internal control and audits (81.9%). The study recommended the necessity of continuing to raise the level of voluntary disclosure in Iraqi banks, The necessity of increasing attention to the optional disclosure by the Iraqi Securities Commission and the scientific, professional and academic organizations and societies, This is to ensure that users of financial reports have access to additional financial and non-financial information, which helps them to make rational investment decisions.

Does voluntary balance sheet disclosure mitigate post-earnings-announcement drift?

Theory suggests that balance sheet information such as total assets, total equity, or total liabilities complements earnings information in helping investors assess a firm’s profitability and estimate earnings growth. The voluntary disclosure of balance sheet information at earnings announcement could help investors gather and process this information at a lower cost. We therefore predict that voluntary balance sheet disclosure at the time of an earnings announcement helps investors promptly understand the implication of current earnings news for future earnings and subsequently reduces post-earnings-announcement drift (PEAD). Consistent with these predictions, our results show that when firms provide voluntary balance sheet disclosures, the earnings response coefficient in the event window is significantly higher and the corresponding PEAD is significantly lower. We further find that the impact of voluntary balance sheet disclosure on PEAD is more pronounced when the magnitude of balance sheet value surprise is larger, when balance sheet value is more informative about future earnings, when earnings uncertainty is higher, or when information cost is higher, consistent with our conjectures that helping investors to better understand future earnings performance and lowering information costs are key mechanisms underlying the effect of voluntary balance sheet disclosure on PEAD.

Voluntary information disclosure with heterogeneous beliefs

We present a model in which an insider (i.e., manager or CEO) and an informed outsider (i.e., financial analyst or professional) have heterogeneous beliefs on their shared information about a risky asset and analyze the insider's incentive to voluntarily disclose this information to the public. We find that with heterogeneous beliefs the insider and informed outsider exploit their shared information differently and this might give rise to the insider's voluntary disclosure of this shared information to the public to seek excess profits. Specifically, the insider is more likely to release the information to the public when she has a greater relative information advantage than the informed outsider and that the informed outsider is more optimistic in the shared information. Our findings shed light on why some firm insiders prefer to trade against informed outsiders while others prefer to drive informed outsiders out of trading through voluntary disclosure.

An Examination into the Investor Protection Properties of Robo-Advisory Services in Switzerland

This article investigated the extent to which the information provided by Swiss-based robo advisers (RAs) on their websites has been conducive to retail investor protection. Text data from eleven RA websites were collected, categorized and analyzed. Findings identified various weaknesses. The nature of the services provided by RAs was unclearly conceptualized. Information on the risks of investing was poorly presented in those websites relative to information that promoted benefits. Disclosures on the workings of automation and algorithms was on average insufficient. Although the websites’ content showed that RAs were reasonably focused on satisfying the customer’s best interest, the information made available fell short of reassuring customers. These shortcomings are expected to be remedied, at least in part, following the recent entry into force of the Swiss Financial Services Act (FinSA). Compared with the MiFID II regime, however, FinSA has regulated the conduct of investment advisers and portfolio managers more leniently. It is therefore difficult to see how Swiss-based RAs can strive to dispense the higher MiFID II protection level without recourse to substantial doses of voluntary information disclosures.

Consumer Responses to Firms’ Voluntary Disclosure of Information: Evidence from Calorie Labeling by Starbucks

This paper estimates the impact on consumer behavior of a firm’s voluntary disclosure of information. Specifically, we study the impact of Starbucks’ disclosure of calorie information on its menu boards in June 2013. Using data on over 250,000 consumers’ visits to specific restaurant chains, we estimate difference-in-difference models that compare the change in the probability that consumers recently visited Starbucks to the change in the probability that they recently visited a similar chain that did not voluntarily disclose: Dunkin Donuts. Estimates from difference-in-differences models indicate that we cannot reject the null hypothesis that Starbucks’ disclosure of calorie information had no impact on the probability that consumers patronized Starbucks in the past month. However, we find evidence of a transitory negative impact on the probability of visits the first year after disclosure, and evidence that disclosure reduced the probability of visits by men. These results are useful for understanding how consumers respond to the voluntary disclosure of information, a decision faced by many firms.