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Article
Publication date: 1 September 2001

S. Mitchell Williams

Breaks with the prior literature on intellectual capital disclosure practices in two major ways. First, provides a longitudinal examination of intellectual capital disclosure

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Abstract

Breaks with the prior literature on intellectual capital disclosure practices in two major ways. First, provides a longitudinal examination of intellectual capital disclosure practices in the annual reports of 31 FTSE 100 listed companies from 1996‐2000. Second, investigates the relationship between intellectual capital performance and the extent of intellectual capital disclosure. Between 1996 and 2000 the quantity of intellectual capital disclosure increased. Empirical findings did not indicate a systematic relationship between intellectual capital performance and the quantity of disclosure during the survey period. Results, however, suggest that if intellectual capital performance is too high the amount of disclosure is reduced. This negative association may support the suggestion that firms reduce intellectual capital disclosures when performance reaches a threshold level for fear of competitive advantage being lost. Leverage, industry exposure and listing status was also found to have an influence on the quantity of disclosure.

Details

Journal of Intellectual Capital, vol. 2 no. 3
Type: Research Article
ISSN: 1469-1930

Keywords

Article
Publication date: 11 October 2021

Mahmoud Elmarzouky, Khaldoon Albitar and Khaled Hussainey

This paper aims to investigate whether Covid-19 related information is associated with a higher level of performance disclosure in the annual reports. Furthermore, it examines the…

1920

Abstract

Purpose

This paper aims to investigate whether Covid-19 related information is associated with a higher level of performance disclosure in the annual reports. Furthermore, it examines the moderating effect of corporate governance on the relationship between Covid-19 and the performance disclosure by using three governance mechanisms: board size, board independence and gender diversity.

Design/methodology/approach

The authors use quantitative content analysis. The authors applied an automated textual analysis technique to measure the level of Covid-19 information and performance disclosure for the UK Financial Times Stock Exchange all-share non-financial firms.

Findings

The authors found a significant positive relationship between the Covid-19 disclosure and the firm performance disclosure in the annual reports. The authors also find that both board independence and gender diversity moderate the relationship between the Covid-19 related information and the level of performance disclosure in the annual reports. The authors further run a robustness analysis, which confirms the main results.

Practical implications

The finding is beneficial for the regulatory setters to better understand whether firms provide generic or meaningful Covid-19 information linked to the firm’s performance. The unique findings of this paper are relevant to regulators, governments, management, shareholders and academics.

Originality/value

The authors contribute to the literature in a unique and core research area not researched previously. The paper links the Covid-19 disclosure with the firm performance from the corporate narrative perspective. The paper underlines governance factors as a moderating role in this relationship by considering three main mechanisms: board size, board independence and gender diversity.

Details

International Journal of Accounting & Information Management, vol. 29 no. 5
Type: Research Article
ISSN: 1834-7649

Keywords

Article
Publication date: 17 April 2019

Kim Shima and Scott Fung

The purpose of this study is to use recent US legislative activity surrounding changes to the Environmental Protection Agency (EPA)/Clean Air Act in 2010, which changes the…

Abstract

Purpose

The purpose of this study is to use recent US legislative activity surrounding changes to the Environmental Protection Agency (EPA)/Clean Air Act in 2010, which changes the practice of environmental policy of a firm, and the unique setting of Utility industry to examine the relationship between a firm’s voluntary accounting disclosure and environmental performance.

Design/methodology/approach

This study features hand-collected data of environmental disclosure and examines its relation with environmental performance. To address the endogeneity problem, a difference-in-differences test with propensity score matching is performed to study the impact of policy change on environmental disclosure.

Findings

The findings of this study show that measures of environmental performance have a significant and positive association with a firm’s voluntary disclosure. The results from difference-in-differences test show that adjustments in environmental performance after regulatory change have a causal and positive effect on a firm’s voluntary disclosure.

Research limitations/implications

The findings support theories of signaling and voluntary disclosure that better-performing firms provide more information disclosure of their environmental performance.

Practical implications

The findings show real adjustments in firm environmental performance and consistent voluntary disclosure around the enactment of environmental legislation, which may have important implications for environmental rule making bodies and management about the effectiveness of their regulations.

Originality/value

This study is among the first to examine the causal relationship between environmental performance and disclosure within the context of recent changes in US environmental regulation. This study also provides the Utility industry experiment with difference-in-differences test to tackle endogeneity in the relation between performance and disclosure.

Details

Meditari Accountancy Research, vol. 27 no. 2
Type: Research Article
ISSN: 2049-372X

Keywords

Article
Publication date: 1 January 2006

Marlin R.H. Jensen, Beverly B. Marshall and William N. Pugh

This study seeks to investigate whether a firm's financial disclosure size can help investors predict performance.

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Abstract

Purpose

This study seeks to investigate whether a firm's financial disclosure size can help investors predict performance.

Design/methodology/approach

Controlling for size and industry, the relationship between financial disclosure size and subsequent stock performance for all Standard and Poor's (S and P) 500 firms over a seven‐year period is examined.

Findings

It is found that firms with smaller 10‐Ks tend to have better subsequent performance relative to their industries. However, the findings suggest that the performance explanation may not lie in the size of the 10‐K itself. Firms with smaller 10‐Ks tend to perform better because they are smaller in terms of total assets and more focused, with fewer business segments.

Research limitations/implications

While the study is limited to examination of S and P 500 firms, no consistent evidence is found of a relation between changes in a firm's disclosure size and future performance changes.

Practical implications

The results suggest that more disclosure relative to a firm's size is not necessarily bad. Investors attempting to predict future firm performance cannot use the firm's disclosure size alone.

Originality/value

This paper extends two recent Merrill Lynch studies that appear to contradict the extant financial literature's view that increased disclosure reduces the informational asymmetry problem. While the results confirm the findings of these studies, they suggest that the performance explanation may not lie in the size of the 10‐K itself.

Details

Managerial Finance, vol. 32 no. 1
Type: Research Article
ISSN: 0307-4358

Keywords

Book part
Publication date: 13 September 2023

Ruopiao Zhang and Carlos Noronha

Drawing upon resource-based view (RBV) and attribution theoretical lenses, this chapter provides a paradigm for examining the interplay among environmental investment towards…

Abstract

Drawing upon resource-based view (RBV) and attribution theoretical lenses, this chapter provides a paradigm for examining the interplay among environmental investment towards green innovation, environmental disclosure as well as firm performance using the structural equation modelling (SEM) methodology. This chapter demonstrate a growing environmental awareness among stakeholders of the relevance of environmental performance to share value. It is also suggested that the mediating power of environmental disclosure between environmental investment and firm value as well as incremental goodwill is crucial. The findings of this chapter provide critical implications for several stakeholders that if environmental performance is hypothesised to affect the firm's value, companies may take proactive measures to avert potential environmental-related violations. Besides, investors may trade based on the evidence as to how firm value and its goodwill from acquisition will be affected by news of its environmental performance.

Article
Publication date: 31 October 2023

Jamel Chouaibi, Hayet Benmansour, Hanen Ben Fatma and Rim Zouari-Hadiji

This study aims to investigate the effects of environmental, social and governance (ESG) performance on financial risk disclosure of European companies. It analyzed the…

Abstract

Purpose

This study aims to investigate the effects of environmental, social and governance (ESG) performance on financial risk disclosure of European companies. It analyzed the relationships between ESG factors and financial risk disclosure between 2010 and 2020.

Design/methodology/approach

To test their hypotheses in this study, the authors used the multivariate regression analysis on panel data using the Thomson Reuters ASSET4 database and the annual reports of 154 European companies listed in the ESG index between 2010 and 2020.

Findings

Empirical evidence shows a positive association between European companies' environmental and governance performance with financial risk disclosure, whereas social performance does not influence financial risk disclosure. Concerning the control variables, the findings demonstrate that firm size and profitability are significant factors in changing the financial risk disclosure. Nevertheless, firms’ leverage is insignificantly correlated with financial risk disclosure.

Originality/value

This study extends the stream of accounting literature by focusing on the financial risk disclosure, a topic that has received little attention in previous research. Furthermore, to the best of the authors’ knowledge, this study is one of the first that provides ESG companies with evidence of the effect of ESG factors on financial risk disclosure in a developed market like Europe.

Details

Competitiveness Review: An International Business Journal , vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1059-5422

Keywords

Article
Publication date: 5 July 2023

Alireza Rohani and Mirna Jabbour

This study investigates whether carbon media legitimacy is influenced by carbon performance and/or carbon disclosure using a direct measure of carbon media legitimacy in UK…

Abstract

Purpose

This study investigates whether carbon media legitimacy is influenced by carbon performance and/or carbon disclosure using a direct measure of carbon media legitimacy in UK context.

Design/methodology/approach

To test this study's hypotheses, the authors employ Tobit regression analysis of 95 UK companies listed in FTSE350. The authors use balanced panel data (475 observations in total) to reduces the noise introduced by unit heterogeneity.

Findings

The authors find that while corporate carbon performance is not reflected in carbon media legitimacy, carbon media legitimacy is positively and significantly affected by voluntary carbon disclosure (irrespective of its quality). Thus, voluntary carbon disclosure is shown to be an effective tool in legitimising corporate activities.

Research limitations/implications

The results show a certain degree of naivety on the part of the media in assessing corporate carbon behaviour, since it values carbon disclosure (irrespective of its quality) more than carbon performance. Such media behaviour may hinder future improvement in carbon performance of firms.

Practical implications

This study's results indicate that the existing UK carbon disclosure policy does not address the heart of climate change and global warming. Thus, tougher regulations should be considered by policy-makers in relation to voluntary carbon disclosure in the UK.

Originality/value

To the best of the authors' knowledge, this is the first study to examine whether carbon media legitimacy is associated with both carbon performance and carbon disclosure using a direct measure of carbon media legitimacy, and to use the UK context when addressing this association. It also examines the effectiveness of quality of carbon disclosure as legitimation tool.

Details

Journal of Applied Accounting Research, vol. 25 no. 2
Type: Research Article
ISSN: 0967-5426

Keywords

Open Access
Article
Publication date: 31 January 2023

Gianluca Vitale, Sebastiano Cupertino and Angelo Riccaboni

Focusing on the Agri-Food and Beverage sector, the paper investigates the direct effect of worldwide mandatory non-financial disclosure on several financial dimensions as well as…

3371

Abstract

Purpose

Focusing on the Agri-Food and Beverage sector, the paper investigates the direct effect of worldwide mandatory non-financial disclosure on several financial dimensions as well as its moderating effects on the relationship between sustainability and financial performance.

Design/methodology/approach

The authors performed fixed-effect regressions on a sample of 180 global listed companies, considering a period of eight years. The authors also tested the moderating effects of non-financial disclosure regulation on the relationship between sustainability and financial performance.

Findings

The authors found a positive direct impact of mandatory non-financial disclosure on Operating Return on Asset, Return on Equity and Return on Sales. The analysis also highlighted the negative moderating effects of non-financial reporting regulation on the relationship between sustainability issues and financial performance. As for the Cost of Debt, the authors found mixed results.

Research limitations/implications

This study considers a short-term perspective focusing on a limited sample composed of companies playing a key role in the global agri-food system.

Practical implications

The paper identifies which financial performance dimensions are positively or negatively affected by mandatory non-financial disclosure. Accordingly, managers can rearrange corporate activities to deal with further reporting normative requirements concurrently preserving financial performances and fostering corporate sustainability.

Social implications

This study recommends fostering mandatory non-financial disclosure to increase corporate transparency fostering the sustainability transition of the Agri-Food and Beverage industry.

Originality/value

The paper highlights global mandatory non-financial disclosure effects on financial performance considering a sector that is cross-cutting impactful on plural sustainability issues.

Open Access
Article
Publication date: 1 December 2022

Akshay Jadhav, Shams Rahman and Kamrul Ahsan

This study explores the scope, materiality and extent of environmental and social sustainability disclosure – as benchmarked against the Global Reporting Initiatives (GRI-G4) – of…

2178

Abstract

Purpose

This study explores the scope, materiality and extent of environmental and social sustainability disclosure – as benchmarked against the Global Reporting Initiatives (GRI-G4) – of the top 10 logistics firms operating in Australia. It also investigates the relationships between the extent of environmental and social sustainability disclosure of these firms and their actual financial performance.

Design/methodology/approach

The authors adopted an inductive case study approach for an in-depth investigation of the relationships among concepts. A content analysis of the firms' sustainability reports was performed to determine their pattern and extent of sustainability disclosure against the GRI framework. A disclosureperformance analysis (DPA) matrix was employed to relate the extent of environmental and social sustainability disclosure of these 10 firms with their actual financial performance (i.e. return on assets [ROA] and total revenue growth).

Findings

This study found that the extent of sustainability reporting was relatively high on the labour practices and decent work subgroup, followed by the environmental dimension of the GRI-G4 framework. However, it was relatively low on the society, human rights and product responsibility subgroups of the GRI framework. The DPA revealed that “Leaders” (firms with higher sustainability disclosure levels) achieved significantly higher ROA. However, “Opportunists” (firms with lower sustainability disclosure levels) achieved higher levels of financial returns (i.e. ROA and total revenue growth) with less attention to sustainability issues, which contradicts the win-win view of the sustainability disclosure–financial performance relationship.

Originality/value

First, this study contributes an in-depth review of sustainability disclosure practices of top logistics firms operating in Australia. Second, using DPA, it identifies the novel effects of environmental and social sustainability disclosure levels on these firms' financial performance. It also sheds further light on the potential effect of investments beyond substantial profitability for sustainability growth and corporate governance on the sustainability disclosure–financial performance relationship.

Details

The International Journal of Logistics Management, vol. 33 no. 5
Type: Research Article
ISSN: 0957-4093

Keywords

Article
Publication date: 2 November 2010

Mark Exworthy, Glenn Smith, Jonathan Gabe and Ian Rees Jones

In recent years, the clinical performance of named cardiac surgeons in England has been disclosed. This paper aims to explore the nature and impact of disclosure of clinical…

420

Abstract

Purpose

In recent years, the clinical performance of named cardiac surgeons in England has been disclosed. This paper aims to explore the nature and impact of disclosure of clinical performance.

Design/methodology/approach

The paper draws on literature from across the social sciences to assess the impact of disclosure, as a form of transparency, in improving clinical performance. Specifically, it employs the “programme theory” of disclosure.

Findings

The “programme theory” of disclosure involves identification, naming, public sanction and recipient response. Named individual (consultant) surgeons have been identified through disclosure but this masks the contribution of the clinical team, including junior surgeons. Mortality is the prime performance measure but given low mortality rates, there are problems interpreting this measure. The naming of surgeons has been achieved through disclosure on web sites, developed between the health‐care regulator and the surgical profession itself. However, participation remains voluntary. The intention of disclosure is that interested parties (especially patients) will shun poorly performing surgeons. However, these parties' willingness and ability to exercise this sanction appears limited. Surgeons' responses are emergent but about a quarter of surgeons are not participating currently. Fears that surgeons would avoid high‐risk patients seem to have been unrealised. While disclosure may have a small effect on individual reputations, the surgical profession as a whole has embraced disclosure.

Originality/value

While the aim of disclosure has been to create a transparent medical system and to improve clinical performance, disclosure may have the opposite effect, concealing some performance issues and possibly strengthening professional autonomy. Disclosure therefore represents greater transparency in health‐care but it is uncertain whether it will improve performance in the ways that the policy intends.

Details

Journal of Health Organization and Management, vol. 24 no. 6
Type: Research Article
ISSN: 1477-7266

Keywords

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