This paper aims to examine the impact of ownership concentration on Covid-19 disclosure in the narrative sections of corporate annual reports. It also explores the mediating role of corporate leverage on the ownership concentration–Covid-19 disclosure relationship.
This paper uses automated textual analysis to measure Covid-19 disclosure in annual reports. It also applies different regression models to test the research hypotheses and to address the endogeneity problem. It uses univariate and multivariate analyses through correlations and ordinary least squares.
The analysis shows that ownership concentration has a negative impact on Covid-19 disclosure. It also shows that corporate leverage negatively affects Covid-19 disclosure, and it has a partial mediating effect on the ownership concentration–Covid-19 disclosure relationship.
The results offer important practical implications for the government, management, shareholders and policymakers. For example, corporate managers are encouraged to consider small shareholders’ interests and provide a sufficient level of Covid-19 disclosure to avoid violating their rights. Also, the government may consider forming a mechanism for balancing the ownership structure to protect small investors and weaken large shareholders’ tunnelling behaviours.
This paper offers two important contributions to governance and disclosure literature. First, it provides new empirical evidence on the relationship between ownership concentration and Covid-19 disclosure. Second, it provides new evidence on the mediating role of the leverage ratio on the ownership concentration–Covid-19 disclosure relationship.
Albitar, K., Elmarzouky, M. and Hussainey, K. (2022), "Ownership concentration and Covid-19 disclosure: the mediating role of corporate leverage", International Journal of Accounting & Information Management, Vol. 30 No. 3, pp. 339-351. https://doi.org/10.1108/IJAIM-10-2021-0202
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