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Voluntary disclosure and corporate governance: substitutes or complements for firm value?

Soufiene Assidi (Department of Accounting and Finance, Higher Institute of Informatics and Management of Kairouan, Kairouan University, Kairouan, Tunisia)

Competitiveness Review

ISSN: 1059-5422

Article publication date: 6 January 2023




The purpose of this study is to examine whether voluntary disclosure (VD) and corporate governance (CG) are substitutes or complements to each other in improving firms’ value in a non-Anglo-Saxon setting, namely, France.


This study uses a sample of 990 listed firms in France from 2010 to 2020 to test the theoretical predictions. A random effect regression and two-stage least squares estimators are used to test the relationships. The results are largely robust across a number of econometric models that take into account diverse kinds of endogeneities.


This study reveals that VD and CG are positively associated with firm value. The finding also indicates that VD and CG work together as substitutes rather than as complements. Furthermore, the author’s evidence suggests that ownership structure and CEO characteristics are substitutive with VD in their effect on firm value. This evidence is consistent with the view that VD can add value to the firm but only under a number of conditions.

Practical implications

The results shed further light on how a firm could improve its value among stakeholders by designing VD and CG practices effectively. Specifically, as VD generally acts as a substitute to CG, to accomplish their optimal economic outcomes, firms need to be discerning in executing VD and governance practices. In addition, firms have strategic flexibility in constructing VD and governance practices contingent on their own settings. Policymakers, investors and managers could use these results to examine CG and VD practices in France following the implementation of new regulations.


This study extends and contributes to the mixed or equivocal evidence of the relationships between VD, CG mechanisms and firm value. It contributes to the extant literature by first providing additional evidence, which suggests value-increasing effects of better-governed and more transparent firms. Second, this study reconciles extant disparate results by suggesting that VD can substitute CG in improving firm value. These findings have profound implications for policymakers, investors and firm’s managers.



The author gratefully acknowledges the insightful and timely suggestions by the Editor-in-Chief, Professor Philippe Gugler, and two anonymous reviewers. However, the author is solely responsible for any remaining omissions and commissions.


Assidi, S. (2023), "Voluntary disclosure and corporate governance: substitutes or complements for firm value?", Competitiveness Review, Vol. ahead-of-print No. ahead-of-print.



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