Corporate narrative reporting on Industry 4.0 technologies: do the COVID-19 pandemic and governance structure matter?

Abstract

Purpose

This research examines the impact of the COVID-19 pandemic and governance structure on corporate narrative reporting (CNR) concerning Industry 4.0 (I4.0) technologies in Jordanian commercial banks. The study aims to explore how these factors influence the extent and nature of disclosures in annual reports.

Design/methodology/approach

The study uses a comprehensive manual content analysis method to investigate the annual reports from all 15 Jordanian commercial banks from 2010 to 2022. This approach allows for the detailed examination of I4.0 disclosures, using a specially developed index to measure various disclosure dimensions. An ordinary least squares model is used to assess the determinants of CNR on I4.0, considering factors such as the pandemic’s impact and various governance attributes.

Findings

The findings indicate that both the COVID-19 pandemic and specific governance factors (e.g. board size and audit committee size) significantly enhance the disclosure of I4.0 technologies. The study reveals that during the pandemic, banks significantly increased their level of detailed disclosures about I4.0 strategies, challenges and benefits, reflecting a strategic response to the pandemic’s disruption.

Originality/value

This study introduces a novel I4.0 Reporting Index for banks, measuring disclosures across strategy implementation, business model transformation, challenges and benefits. It adds to the existing literature by offering insights into narrative reporting practices concerning I4.0 technologies within the banking sector and illuminates the impact of the COVID-19 pandemic on these practices.

Citation

Shehadeh, M., Hussainey, K., Alhadab, M. and Kilani, Q. (2024), "Corporate narrative reporting on Industry 4.0 technologies: do the COVID-19 pandemic and governance structure matter?", Review of Accounting and Finance, Vol. 23 No. 5, pp. 687-714. https://doi.org/10.1108/RAF-11-2023-0362