Voluntary Information Disclosure Research Articles

Voluntary Disclosure in Asymmetric Contests

Abstract This article studies the incentives for interim voluntary disclosure of verifiable information in probabilistic all-pay contests with two-sided incomplete information. Private information may concern marginal cost, valuations, and ability. Our main result says that, if the contest is uniformly asymmetric, then full revelation is the unique perfect Bayesian equilibrium outcome. This is so because the weakest type of the underdog reveals her type in an attempt to moderate the favourite, while the strongest type of the favourite tries to discourage the underdog—so that the contest unravels. This strong-form disclosure principle is robust with respect to correlation, partitional evidence, randomized disclosures, sequential moves, and continuous type spaces. Moreover, the assumption of uniform asymmetry is not needed when incomplete information is one-sided. However, the principle may break down when type distributions are too similar, contestants possess commitment power, or information is unverifiable. In fact, cheap talk will always be ignored, even if mediated by a trustworthy third party.

Sustainability Reporting and Performance of Selected Quoted Firms in Nigeria

The performance of quoted firms listed on the Nigerian Exchange Group (NGX) is crucial for driving economic development, job creation, and wealth generation in Nigeria. Despite the growing interest in sustainability practices among Nigerian firms, there is a lack of empirical research examining the relationship between sustainability reporting and financial performance. To address this gap, this study conducted a comprehensive analysis of the link between sustainability reporting and the financial performance of quoted firms in Nigeria. This research employed an ex-post facto research approach, utilizing data from annual reports, financial statements, and sustainability reports of 153 publicly listed companies on the Nigerian Exchange Group (NGX). Through quantitative methods, the study assessed the extent and quality of sustainability reporting among Nigerian companies and its relationship with financial performance indicators. A purposive sampling method was used to select a sample of 10 firms known for their voluntary disclosure of information in financial reports. The study spanned from 2012 to 2021, totaling 10 years, and involved both descriptive and inferential statistical analyses of the collected data. Using regression analysis, the study found a statistically significant positive impact of sustainability reporting metrics - including governance information disclosure, credibility information disclosure, and environmental profile disclosure - on firm performance. This suggests that companies in Nigeria that disclose information regarding governance policies, credibility, and environmental practices tend to perform better financially.This study concluded that companies that engage in transparent reporting regarding governance policies, credibility, and environmental practices demonstrate better financial performance. Based on the findings, it is recommended that Nigerian regulators and policymakers encourage and support sustainability reporting initiatives among quoted firms.

ACCOUNTING INFORMATION DISCLOSURE: HOW FAR IS SO FAR

Purpose: Accounting information asymmetry increases moral hazard, agency costs, shareholders’ discontent, and further aggravates the discomfort of minority shareholders. As such, how far is so far when connecting information disclosure with firm characteristics has remained a debate. This study thus investigated the nexus between firm characteristics and accounting information disclosure with emphasis on the banking sub-sector in Nigeria. Theoretical Framework: Accounting information disclosure is not hidden from theoretical discussions within the corridors of opportunistic behaviors, agency-theory and information asymmetry or information failure theory Design/Methodology/Approach: Annual reports of eleven top banks in Nigeria were analyzed covering a period of 5 years from 2010 to 2014 using the firm characteristics – size, profitability, age, and international presence. A disclosure checklist consisting 137 voluntary items was developed and multiple regression analysis performed. Findings: The results revealed a positive significant relationship between accounting information disclosure with age, international exposure, and a negative significant relationship was observed for profitability and size. Generally, the level of disclosure in the banking sector was found to be high at 62%. Research, Practical & Social Implications: This study recommends accounting information democratization and sharing to build and restore confidence in banks’ activities and public perception. Originality/Value: The investigation on how far is so far in accounting information disclosure should be perceived from the eye of the stakeholders investments. Be that as it may, it is only fair and ethically moral for persons/groups that have invested in a business and or in a bank to regularly have access to concrete and verifiable mandatory and voluntary information disclosure on the financial position of their hard-earn funds to make reasonable decisions.

Pathos or logos? How governance legitimacy perception influences individual privacy trade-offs during COVID-19 pandemic

The COVID-19 pandemic has brought attention to the delicate balance between individual privacy concerns and the governance of public health emergencies. Governments are leveraging a wide range of digital methodologies to acquire individual-level data for purposes such as contact tracing, isolation protocols, and surveillance, all aimed at effectively mitigating the deleterious consequences of the epidemic. However, the surrender of individual health information depends on individuals’ perception of the legitimacy of governance. In this research, our objective is to examine how individuals’ perceptions of the legitimacy of governance impact their decisions regarding privacy disclosure. This study stands out by dissecting cognitive and moral legitimacy of governance, uniquely examining their influence on individuals’ altruistic privacy disclosure during a crisis. Unlike previous research, our approach offers a more nuanced understanding of the interplay between governance legitimacy and privacy concessions. From July 15th to August 14th, 2022, amid the 2022 lockdown in Shanghai, China, this study utilizes surveys with established measurement scales, alongside structural equation modeling (SEM), to explore the relationship between individuals’ perceptions of government legitimacy in managing the pandemic and their willingness to compromise health information. The study distinguishes between moral legitimacy (pathos) and cognitive legitimacy (logos). The results find that both cognitive and moral legitimacy positively influence altruism, thus enhancing the efficacy of voluntary disclosure of personal health information to government agencies for pandemic governance. However, it is noteworthy that education level moderates the impact of these two dimensions of legitimacy on altruism. This research provides empirical evidence to enhance our understanding of how different dimensions of citizens’ perceptions of governance legitimacy in crisis situations shape their attitudes and behaviors towards privacy trade-offs.

Drivers and consequences of borrowers' voluntary privacy information disclosure—Evidence from a Chinese online consumer financing platform

AbstractThis study explores the drivers and consequences of consumers' voluntary information disclosure in the context of online consumer financing. Using unique secondary data from a Chinese online consumer financing company, we uncover a non‐linear relationship between borrowers' credit ratings and the quantity of voluntary information disclosure, and an inverted U‐shaped relationship between the amount of information disclosure and loan default. Specifically, low‐credit borrowers who opt for more voluntary information disclosure manifest a higher likelihood of default than those who disclose less, suggesting a strategic inclination toward information disclosure. Finally, we identify that disclosing high‐cost information reduces loan default, whereas disclosing low‐cost information increases default. Our findings enrich the existing literature on consumer information disclosure by providing insights into the underlying motivation and highlighting the applicability of signaling theory and privacy calculus theory. This has practical implications for lenders, borrowers, and regulators in overcoming barriers in online lending.

Sustainability disclosure in the pharmaceutical and chemical industries: Results from bibliometric analysis and AI-based comparison of financial reports

Climate change is a pressing global challenge, and companies are under increasing pressure to adopt sustainable practices and transparently disclose their environmental performance. This study focuses on the Italian pharmaceutical industry to gain insights into the level of stakeholder and management attention to climate change and the growth of academic research in this critical area. We employ a bibliometric analysis of scientific literature and a content analysis of financial statements to examine sustainability practices and reporting in both pharmaceutical and chemical companies.Our findings reveal a significant difference in stakeholder expectations and commitment to addressing climate change between the two industries. The chemical industry has demonstrated a stronger focus on sustainability, as evidenced by higher academic research and environmental disclosure levels. In contrast, the pharmaceutical sector has shown a comparatively lower level of environmental reporting and sustainability practices. However, our analysis shows a positive trend in pharmaceutical companies’ voluntary disclosure of environmental information in their financial reports.These results highlight the need for increased focus and effort in the pharmaceutical industry to address climate change and improve sustainability practices. Pharmaceutical companies can build stakeholder trust, improve environmental sustainability, increase transparency in reporting, align practices with global sustainability goals, enhance their reputation, and reduce their environmental impact. This research provides valuable guidance for policymakers, researchers and practitioners in promoting sustainable practices in the pharmaceutical industry and contributes to the broader understanding of ESG disclosure and climate change.

Research on Enterprise Green Accounting Information Disclosure under the Background of Low-carbon Economy

In order to explore the low carbon economic background of green accounting information disclosure, understand the industry how to adapt to the sustainable development and environmental trends, the article from the overview of the low carbon economy, analyzes the low carbon economy of home appliance enterprise green accounting information disclosure requirements, after according to the current home appliance enterprise green accounting information disclosure problems put forward the specific solutions, including encouraging home appliance enterprise voluntary disclosure of social responsibility information, improve the home appliance enterprise green accounting information disclosure constraint system, improve the home appliance enterprise green accounting information disclosure content, etc. Research shows that the green accounting information disclosure in the home appliance industry plays a key role in the era of low-carbon economy, and helps to improve the sustainability, transparency and credibility of enterprises. However, there are still some challenges, in order to achieve a greener and more sustainable economic development, home appliance enterprises need to further improve their green accounting information disclosure practices to meet the growing demand for environmental protection.

Disclosure-based regulation and municipal security trade prices

Purpose This paper aims to measure the trade price impact of a recent regulatory disclosure intervention in municipal securities secondary markets, which required broker-dealers to disclose securities trading information on a near-real-time and continuing basis. Design/methodology/approach The author analyzes trade price outcomes in the preintervention and postintervention regimes using a suite of time series estimations that give heteroskedasticity-robust standard errors (Prais–Winsten and Cochrain–Orcutt), accommodate higher-order lag structure in the error term (autoregressive integrated moving average) and account for volatility clustering in the time series (generalized autoregressive conditional heteroskedasticity). Findings Results show that regulatory disclosure intervention significantly improved trade price efficiency in municipal securities secondary markets as daily trade price differential and volatility both declined market-wide after the disclosure intervention. Research limitations/implications The sample consists of trades in State of California general obligation bonds; therefore, empirical findings may not be generalizable to other states, local governments and different types of bonds. Practical implications The findings highlight voluntary information disclosure as a practical and effective mechanism in disclosure regulation of municipal securities secondary markets. Originality/value Only a small body of work exists that examines information disclosure regulation in municipal securities secondary markets; therefore, this paper expands knowledge on the topic and should provide renewed impetus for regulatory efforts aimed at improving the efficiency of municipal capital markets.

Evidence of sustainable development goals disclosure in publicly traded Brazilian companies

Purpose: This article examines if publicly traded Brazilian companies listed on the Brazil 50 Index (IBrX50) and the Corporate Sustainability Index (ISE) use Sustainable Development Goals to guide their environmental, social, and governance practices (ESG).
 Methodology: The evaluation is carried out through the descriptive content analysis of companies listed on the IBrX50. We highlight that they were also listed on the ISE B3 in the year 2022. Data was gathered from the companies’ sustainability reports and on websites specialized in ESG assessments.
 Results: The research presents analogies between the ISE B3 and the IBrX50 theoretical portfolios while analyzing the assets in their portfolios and ESG scores. We additionally look into the proximity of the assets in relation to the disclosure of the Sustainable Development Goals in their sustainability reports. We found that, although most companies publish sustainability reports and mention the SDGs, few disclose the goals and initiatives aimed at sustainable development practically.
 Contributions of the Study: The article contributes to the field of research on the voluntary disclosure of information on sustainability. It presents an initial overview on SDGs disclosure in sustainability reports within the Brazilian context. Future studies may explore analyzes which include ESG practices in companies.

Estrutura do conselho de administração como mecanismo para atingir a Agenda 2030 na América Latina

Abstract This study aims to investigate the effect of board structure on companies’ engagement with the Sustainable Development Goals (SDGs). The characteristics of the board of directors related to the size of the board, independence, and diversity were analyzed, as well as the disclosure of the 17 SDGs of 371 companies headquartered in Latin America from 2016 to 2020. The data were analyzed using data regression in a panel with fixed effects and regression of panel data using the logit method. Research findings showed that board size and board independence have a positive effect on SDG disclosure. The results are in line with the Upper Echelons Theory, as it advocates that the company’s strategic choices and positioning are made by senior management - the members of the board of directors. The research expands the explanation of this theory, confirming that top management is crucial for strategic positioning in environmental and social issues. Managers and shareholders must understand that certain features, such as the social responsibility committee and the preparation of a sustainability report, can also contribute to the 2030 Agenda. At the government level, the results are useful for public policy makers, as they can encourage the creation of norms for the voluntary disclosure of environmental and social information.

Why do audit clients voluntarily disclose the compliance and planning components of auditor provided tax services?

Criticisms of audit firms marketing and devising tax avoidance strategies for their audit clients have led to calls from regulators, investors, and proxy advisors for more detailed disclosures on the composition of tax non-audit services (NAS). Using a hand-collected dataset, we examine the determinants of audit clients’ voluntary bifurcation of total tax NAS fees into the tax planning and compliance components, and the effect of these voluntary disclosures on firm value. We find that firms with higher levels of tax NAS are more likely to provide this disclosure, as well as firms that engage in higher levels of tax avoidance and have accounting experts serve on the audit committee. Using textual analysis, we find that among voluntary tax NAS fee breakdown disclosers, firms with higher total tax and, specifically, tax planning NAS fees have longer and less similar tax NAS fee disclosures relative to the prior period disclosure. Our firm value analyses indicate higher valuations for firms providing voluntary breakdown disclosures when these disclosures reveal high tax NAS fees generally, and high tax planning NAS fees specifically. The firm valuation effects are incrementally more pronounced when voluntary tax NAS fee breakdown firms report higher tax avoidance and expert audit committee oversight. Our results suggest that the voluntary disclosure of private information regarding the nature of tax NAS is one mechanism through which firms facing scrutiny over the implications of these services can alleviate information asymmetry and stakeholder skepticism of tax NAS.

Private Loan Disclosure Covenants and Public Management Guidance

Prior research provides little evidence about whether the information demands of private lenders affect the information environment of borrowers’ public shareholders. Using a covenant in loan contracts, lenders can require borrowers to periodically provide projected financial statements. We examine borrowers’ voluntary disclosure of prospective financial information (“management guidance”) to the public after being subject to the disclosure covenant. We find that the disclosure covenant is associated with more frequent management guidance. This relation is attributable to borrowers increasing nontraditional earnings guidance and non-earnings financial guidance. In falsification tests, we find that a covenant requiring borrowers to provide monthly historical financial information is not associated with management guidance and that the prospective financial information disclosure covenant is not associated with voluntary disclosure of nonfinancial information. Our results suggest that a firm’s contractual obligation to provide projected financial information to private lenders increases the quantity and breadth of its voluntary guidance to public shareholders.

The Impact of Corporate Voluntary Disclosure and Financial Leverage on The Relationship Between Corporate Governance and Shareholders' Value: Proposed Framework

Objective: The purpose of this study is to propose a conceptual framework that investigates the impact of corporate governance practices on shareholder value. Theoretical framework: The proposed framework of this study is established based on agency theory and stewardship theory to establish the interrelationships among the models in this study. Method: In line with previous research, corporate governance practices have been shown to improve information disclosure through voluntary disclosure. Result and conclusion: This leads to maximizing the shareholders' value, as discussed in this paper. Financial leverage as a moderator factor is found to be a potentially significant factor in strengthening the effect of voluntary disclosure of information on the shareholders' value. Conclusion: Corporate governance practices play a pivotal role in enhancing shareholder value, especially when considering the influence of voluntary disclosure and the moderating effect of financial leverage. Originality/Value: The unique contribution of this research lies in its comprehensive analysis of the relationships between corporate governance practices, voluntary information disclosure, financial leverage, and their combined influence on shareholder value.

Should Brands Talk about Environmental Sustainability Aspects That “Really Hurt”? Exploring the Consequences of Disclosing Highly Relevant Negative CSR Information

When communicating their CSR (Corporate Social Responsibility) activities many companies predominantly release positive information. However, relying solely on positive information holds potential risks. Brands are consequently confronted with the dilemma of whether to exclusively disclose positive details about their environmental CSR activities (i.e., one-sided messages) or opt for voluntary disclosure of positive and negative information (i.e., two-sided messages). Existing literature distinguishes moderately and highly relevant types of negative information. However, prior research has predominantly overlooked the investigation of highly relevant negative CSR information. Therefore, our primary objective is to explore the impact of two-sided messages encompassing highly relevant negative CSR information in comparison to one-sided messages. We conducted four online experiments in two countries with different brands (study 1 (Germany, Mercedes-Benz, n = 457); study 2 (Germany, Porsche, n = 431); study 3 (USA, Mercedes-Benz, n = 468) and study 4 (USA, Tesla, n = 465)). The results reveal that two-sided messages with the disclosure of highly relevant negative CSR information lead to negative effects in comparison to one-sided messages with only positive information. Consequently, brands should exercise caution in communicating highly relevant negative CSR aspects. Our findings offer notable theoretical insights and practical implications.

Let others know who your friends are: The effect of collaborator disclosure on crowdfunding performance

AbstractOur analysis of 141,848 campaigns on the Kickstarter crowdfunding platform suggests that collaborator disclosure has a substantial positive impact on crowdfunding performance. This finding is consistently supported by a series of robustness tests. Collaborator disclosure alleviates backers' concerns about campaign risk, the competence of the fundraiser, and the fundraiser's lack of experience. Our findings highlight the significance of disclosing information about collaborators in financial markets with high levels of information asymmetry. In addition, our research adds to the existing literature on voluntary information disclosure and its ability to alleviate market frictions.

On the voluntary disclosure of redundant information

Why do firms engage in costly, voluntary disclosure of information which is subsumed by a later announcement? We consider a model in which the firm's manager can choose to disclose short-term information which becomes redundant later. When disclosure costs are sufficiently low, the manager discloses even if she only cares about the long-term price of the firm. Intuitively, by disclosing, she causes early investors to trade less aggressively, reducing price informativeness, which in turn increases information acquisition by late investors. The subsequent increase in acquisition more than offsets the initial decrease in price informativeness and, consequently, improves long term prices.

Voluntary information disclosure of an e-commerce platform under reselling, marketplace, and hybrid selling

This study investigates an e-commerce platform's incentive to voluntarily disclose demand information to an upstream manufacturer. In contrast to previous studies that emphasize the platform's mandatory (or ex-ante) information disclosure, this study examines voluntary (or ex-post) information disclosure, which allows the platform to selectively decide whether to perform information disclosure based on the level of forecast demand. The typical online selling channels in which the platform or the manufacturer (or both) play the role of seller are identified as reselling, marketplace, and hybrid cases. In each transaction case, the interactions between the platform's information disclosure strategy, the level of forecast demand, the platform's forecasting capability, the degree of demand uncertainty, and channel substitutability are analyzed. We find that information on good market demand should be withheld in the reselling case, information indicating a slightly below-average market condition should be withheld in the marketplace case, and information on good or poor demand should be withheld in the hybrid case. The platform is more likely to perform information disclosure as the forecasting capability or the degree of demand uncertainty increases. Moreover, both the platform and the manufacturer can benefit from a well-formulated voluntary information disclosure strategy. Our findings show e-commerce platforms how to better exploit demand forecast information in a voluntary disclosure setting and provide an explanation for practices such as their focus on improving their forecasting capability and market potential.

Does environmental information disclosure affect green innovation?

Environmental information disclosure (EID) is a critical element of corporate disclosure that can demonstrate companies’ dedication to environmental protection to stakeholders who are concerned about the environment. Using green patent data of Chinese listed companies, this paper tests the influence of EID on green innovation (GI) and the regulating role of digital transformation. Results show that EID has a positive impact on GI and that the relationship is significantly influenced by corporate digital transformation. Additionally, the moderating effect of digital transformation is more significant with high information opacity, financing dependence, and social attention. This study contributes to the literature on the perspective of firm-level voluntary information disclosure and proposes a more comprehensive logical analysis framework for the effect of EID on GI. Moreover, digital transformation can assist companies in identifying and disclosing environmental information more accurately, which increases the effectiveness of EID. Lastly, the findings emphasize the policy implications of utilizing digital technology for EID and the vital role of government regulation and guidance in EID.

The impacts of corporate governance on firms’ performance: from theories and approaches to empirical findings

PurposeThis study aims to investigate the relationship between corporate governance (CG) and financial performance in the case of publicly listed companies in Vietnam for the period from 2019 to 2021. The topic is crucial in understanding how effective governance practices can influence the financial outcomes of companies. The study sheds light on the link between CG practice and firm financial performance. It also provides insights for policymakers and practitioners to improve CG practices.Design/methodology/approachDue to the potential dynamic endogeneity in CG research, this study uses the generalized system methods of moments to effectively address the endogeneity problem. Financial performance is measured by Tobin’s Q, return on equity (ROE) and return on assets (ROA). Based on organization for economic cooperation and development (OECD) standards, these indices were calculated to assess the influence of CG practices on corporate financial performance, namely, for accounting information (ROA and ROE) and market performance (Tobin’s Q and service à resglement différé (SRD) – stock price volatility) for the period 2019–2021. In addition, the study examines the relationship between changes in the CG index and changes in financial performance.FindingsThe study’s main objective is to determine the relationship between CG performance scores and financial performance. The study found a positive relationship between transparency disclosure and financial performance and a positive correlation between CG and company size. The COVID-19 pandemic caused a decrease in transparency and information index scores in 2021 compared to 2019 and 2020 due to delayed General Meetings of Shareholders. The study failed to find a relationship between shareholder rights index (“cg_rosh”) and board responsibility (“cg_reob”) and financial performance, concerning which the findings of this study differ from those of previous studies. Reasons are put forward for these anomalies.Originality/valuePolicymakers need to develop a set of criteria for assessing CG practices. They also need to promulgate specific regulations for mandatory and voluntary information disclosure and designate a competent authority to certify the transparency of company information. The study also suggests that companies should develop CG regulations and focus on regulations relating to the business culture or ethics, as well as implementing a system to ensure equal treatment among shareholders. The study found that good CG practices can positively contribute to a company’s financial performance, which is crucial for investors to evaluate the quality of CG practices for each listed company so that investment risks can be limited.

Sentimental Sustainability: Does What Companies Say Tell More Than What Companies Do?

AbstractBased on a sample of more than eleven thousand unique 10‐K reports of US companies filed with SEC in period 2013 to 2018, this study examines the relationship between actual sustainability performance of companies, evaluated by MSCI ESG performance scores, and the extent and the scope of environmental, social, and governance information disclosure in their annual reports. The study shows empirical evidence supporting the signalling theory view of voluntary disclosure of ESG information in annual reports for most industries, while environmentally unfriendly companies belonging to the Mining industry division show excessive reporting behavior favoring environmental topics, which is consistent with incentives to improve public image and mitigate social, political, and legal risks in line with the legitimacy theory of information disclosure. When differentiating between forward‐looking and non‐forward‐looking ESG statements, the study shows that companies providing more forward‐looking ESG information in annual reports show better next‐year ESG performance. This study implements established content analysis techniques with focus on ESG reporting and performance, building up on the study of Baier, Berninger, and Kiesel (2020) that proposed an ESG‐tailored dictionary for textual analysis purposes.