Delegating Disclosure and Production Choices

2014 ◽  
Vol 90 (3) ◽  
pp. 835-857 ◽  
Author(s):  
Mark Bagnoli ◽  
Susan G. Watts
Keyword(s):  
Product Differentiation ◽  
Voluntary Disclosure ◽  
Information Environment ◽  
Firm Characteristics ◽  
Ex Ante ◽  
Firm Owners

ABSTRACT We study how joint delegation of production and disclosure choices alters the incentives that firm owners offer to their managers. Our first set of results shows how the incentive weights that owners place on revenues are affected by firm characteristics and by whether their manager chooses ex ante voluntary disclosure. This arises because the owners choose how sensitive the manager's compensation is to her production choice and, because this sensitivity is naturally greater if the manager opts to disclose, owners substitute disclosure for direct contractual incentives. Owners also substitute a rival firm's disclosures for direct incentives. Finally, we show that joint delegation alters the information environment for competing firms by creating incentives to provide more information about the less aggressive competitor and less information about the more aggressive competitor. All of these effects are exacerbated in industries with less product differentiation.

Institutional Dual-Holders and Managers' Earnings Disclosure

2021 ◽  
Author(s):  
Leila Peyravan ◽  
Regina Wittenberg-Moerman
Keyword(s):  
Adverse Effect ◽  
Commercial Bank ◽  
Private Information ◽  
Voluntary Disclosure ◽  
Information Environment ◽  
Earnings Forecast ◽  
Excess Returns ◽  
Lending Relationships ◽  
Playing Field ◽  
Information Advantage

We investigate how institutional (non-commercial bank) investors that simultaneously invest in a firm's debt and equity (dual-holders) influence the firm's voluntary disclosure. Because institutional dual-holders trade on private information gleaned through lending relationships, we predict and find that borrowers increase earnings forecast disclosure to reduce these investors' information advantage following the origination of loans with their participation. We also show that the increase in disclosure is stronger when the access to a borrower's private information endows dual-holders with a greater information advantage and when the consequences of this access are likely to be more pronounced. We further find that institutional dual-holders earn excess returns when trading equity of non-guider firms following loan origination, but not when firms issue guidance, confirming that earnings disclosure helps level the playing field among investors. Our findings highlight that firms actively use disclosure to mitigate the adverse effect of dual-holders on their information environment.

Determinants of corporate social and environmental voluntary disclosure in Saudi listed firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Helmi A. Boshnak
Keyword(s):  
Corporate Governance ◽  
Firm Size ◽  
Ownership Structure ◽  
Voluntary Disclosure ◽  
Firm Characteristics ◽  
Content Type ◽  
Listed Firms ◽  
Corporate Social ◽  
The Impact ◽  
Ifrs Implementation

Purpose This paper aims to examine firm characteristics and ownership structure determinants of corporate social and environmental voluntary disclosure (CSEVD) practices in Saudi Arabia to address the paucity of research in this field for Saudi listed firms. Design/methodology/approach The paper uses manual content and regression analyses for online annual report data for Saudi non-financial listed firms over the period 2016–2018 using CSEVD items drawing on global reporting initiative-G4 guidelines. Findings Models show that Saudi firm CSEVD has increased over time compared to previous studies to an average of 68% disclosure due to new corporate governance regulations and IFRS implementation. The models show that firm size, leverage, manufacturing industry type and government ownership are positive determinants of CSEVD, while family ownership is the negative driver of CSEVD. However, firm profitability, audit firm size, firm age and institutional ownership have no impact on the level of CSEVD. Originality/value Using legitimacy and stakeholder theories, the paper determines the influence of firm characteristics and ownership structure on CSEVD, identifying implications for firm stakeholders and providing some evidence on the impact of corporate governance regulation and IFRS implementation on such disclosure. The paper provides additional evidence on progress towards Saudi’s Vision 2030.

Information Externalities of SFAS 161: Evidence from Supply Chains

2020 ◽  
Author(s):  
Jing Chen ◽  
Yiwei Dou ◽  
Youli Zou
Keyword(s):  
Supply Chains ◽  
Voluntary Disclosure ◽  
Information Environment ◽  
Short Term ◽  
Positive Information ◽  
Stock Liquidity ◽  
Disclosure Policy ◽  
One Year

Effective in 2009, SFAS 161 requires enhanced disclosures about derivative use and hedging activities. We test for changes to the information environment of firms whose disclosure policy is unaffected by this standard directly. Using a sample of non-users of derivatives, we find an increase in stock liquidity after their critical customers expand derivative disclosures under SFAS 161. The effect persists for one year and becomes insignificant in subsequent years as the firms dial back their voluntary disclosure. The effect is also more salient for firms that have stronger economic links with their customers and for firms whose customers exhibit more significant improvements in derivative disclosures. The findings suggest that the mandatory derivative disclosures due to SFAS 161 lead to short-term positive information externalities along supply chains.

scholarly journals The Role of Firm Characteristics in Voluntary Disclosure of IC Information and Its Importance for High-Tech Companies

2019 ◽  
Vol 43 (2) ◽  
pp. 185-209
Author(s):  
Ana Rep ◽  
Katarina Žager ◽  
Cidália Oliveira
Keyword(s):  
Significant Influence ◽  
Intellectual Capital ◽  
Voluntary Disclosure ◽  
High Tech ◽  
Firm Characteristics ◽  
Content Analysis Method ◽  
Independent Variable ◽  
A Company

The purpose of this paper is to analyse whether the extent and quality of voluntarily disclosed information regarding intellectual capital (IC) are correlated with certain characteristics of a company. IC is very important for IT companies. Therefore, financial and non-financial statements of 32 high-tech companies were investigated using the content analysis method. To test the influence of firm characteristics on the intellectual capital disclosure index (ICDI), the regression model was used. The size of the firm was the only independent variable that has had a statistically significant influence on the ICDI. The auditor type, as well as financial ratios, have not shown a statistically significant influence on the extent and quality of IC disclosures. This study reflects the state regarding the voluntary IC disclosures in Croatia and therefore the study may be a roadmap for further research and, more importantly, might promote awareness of the importance of transparent reporting.

scholarly journals The impact of firm characteristics on the voluntary disclosure – evidence on the top 50 listed firms of Forbes Vietnam

2021 ◽  
Vol 18 (1) ◽  
pp. 215-222
Author(s):  
Tran Quoc Thinh
Keyword(s):  
Voluntary Disclosure ◽  
Time Series Data ◽  
Ordinary Least Squares ◽  
The State ◽  
Series Data ◽  
State Agencies ◽  
Firm Characteristics ◽  
Listed Firms ◽  
Size Growth ◽  
The Impact

Disclosure plays an important role for information users. Voluntary disclosure is more meaningful for stakeholders in order to make appropriate decisions. The article researches the impact of firm characteristics on the voluntary disclosure of the top 50 listed firms in Forbes Vietnam (50 listed firms) from 2015 to 2019. It uses the ordinary least squares of time-series data to test the regression model. The signaling and agency theory is used to explain the relationship between firm characteristics on voluntary disclosure. The research results show three variables of firm characteristics that positively impact the voluntary disclosure of 50 listed firms, including firm size, growth rate of market share value to book value, and audit type, in which audit type has the strongest influence. Accordingly, the state agencies of Vietnam should encourage 50 listed firms to improve the Vietnamese listed firms’ voluntary disclosure and meet international economic integration. AcknowledgmentWe would like to thank Assoc. Prof. Ngoc Thach Nguyen (Phd), Assoc. Prof. Hoang Anh Ly (Phd) and Assoc. Prof. Thi Loan Nguyen (PhD), as well as some experts of the State Securities Commission of Vietnam and some leaders of 50 listed firms for their advice and support the project.

scholarly journals Structure of Integrated Reporting, Voluntary Disclosure and Firm-Specific Characteristics in Saudi Arabian Companies

2021 ◽  
Vol 16 (10) ◽  
pp. 73
Author(s):  
Mohammad Hariri
Keyword(s):  
Voluntary Disclosure ◽  
Information Disclosure ◽  
Stock Exchange ◽  
Saudi Arabian ◽  
Positive Association ◽  
Research Direction ◽  
Future Research ◽  
Firm Characteristics ◽  
Integrated Reporting ◽  
Corporate Information

The present study aims towards three research purposes. Firstly, it intends to reveal the pattern that associates the elements of the Integrated Reporting (IR) of companies listed on the Saudi Arabian Stock Exchange (Tadawul). Secondly, it verifies the existence of a relationship between IR practices and some firm-specific characteristics. Third, it examines the similarities between the IR practices of these companies. IR communicates how an organization's strategy, governance, performance, and prospects lead to value creation. The dataset used for the IR elements is retrieved from Tadawul and consists of data regarding integrated reports for 126 companies listed in 2019; while the data for the firm-specific characteristics, as the size of the company, the auditor type and the type of company are extracted from Marketscreener.com and Argaam.com portals. The methodology used consists of the empirical-analytical approach with the use of Optimal Scaling techniques. Main findings consist of a positive association found between the elements of the IR, as well as that the specific characteristics of the firms are not related to the elements of the IR. In our results a dissimilarity is found in the corporate information disclosure practices. These findings reveal a need for a deep investigation of the IR elements and firm characteristics in Saudi Arabian companies. One of the future research direction is a multilinear data for various years such that can reveal a more comprehensive understanding of IR elements and firm characteristics. This study becomes relevant in the context of IR elements and firm characteristics relations, that are not yet studies at their research potential.

scholarly journals Firm-Value Effects of Carbon Emissions and Carbon Disclosures—Evidence from Korea

2021 ◽  
Vol 18 (22) ◽  
pp. 12166
Author(s):  
Jeong-Hwan Lee ◽  
Jin-Hyung Cho
Keyword(s):  
Environmental Policy ◽  
Carbon Emissions ◽  
Environmental Performance ◽  
Voluntary Disclosure ◽  
Firm Value ◽  
Positive Relationship ◽  
Traditional View ◽  
Firm Characteristics ◽  
Specific Data ◽  
Historical Developments

We examine the association between carbon emissions, carbon disclosures, and firm value for Korean firms, with a particular interest in chaebols, a special type of Korean conglomerate. Using hand-collected carbon emissions and firm-specific data for 841 Korean firms, including 514 chaebols and 335 non-chaebols, we find a significantly positive relationship between carbon emissions and firm value among chaebol affiliates. This result contrasts with previous findings conducted in advanced markets, where investors consider carbon emissions to be destructive. In terms of the voluntary disclosure policy, we find that companies with good environmental performance tend to disclose carbon emissions voluntarily. We further argue that these findings originate from the specific business atmosphere in Korea. Our results support the traditional view of corporations in terms of environmental policy and highlight the importance of firm characteristics and historical developments in the analysis of environmental policy.

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