Voluntary disclosure and risk in an emerging market.

Hassan, Omaima A.G.; Giorgioni, Gianluigi; Romilly, Peter; Power, David M.

Abstract

This paper seeks to examine the association between corporate voluntary disclosure and systematic (market or beta) risk for a sample of Egyptian listed companies. Using panel data analysis, beta is regressed on the level of voluntary disclosure and the following control variables: dividend payout, asset growth, gearing, firm size and book-to-market ratio. The results generally show a negative relationship between voluntary disclosure level and beta, consistent with predictions of a differential information model and theories about the economic consequences of increased disclosure. The results are dependent on the specification of the model and the market index used to estimate beta, suggesting a need for further research on the link between risk and voluntary disclosure in the context of emerging markets. The main implication of these results is that more voluntary information about listed companies seems preferable to less, in order to reduce the perceived riskiness of a company. This should act as an incentive for listed companies to enhance public disclosure. This is one of the first studies to explore the economic consequences of increased disclosure in an emerging capital market using panel data analysis. Another distinctive feature is that market betas are estimated using different measures to obtain greater confidence in the overall conclusions.

Citation

HASSAN, O.A.G., GIORGIONI, G., ROMILLY, P. and POWER, D.M. 2011. Voluntary disclosure and risk in an emerging market. Journal of accounting in emerging economies [online], 1(1), pages 33-52. Available from: https://doi.org/10.1108/20421161111107840

• Journal Article Type: Article
• Acceptance Date: Feb 22, 2011
• Online Publication Date: Feb 22, 2011
• Publication Date: Jun 30, 2011
• Deposit Date: Nov 15, 2021
• Publicly Available Date: Jul 15, 2022
• Journal: Journal of accounting in emerging economies
• Print ISSN: 2042-1168
• Electronic ISSN: 2042-1176
• Publisher: Emerald
• Peer Reviewed: Peer Reviewed
• Volume: 1
• Issue: 1
• Pages: 33-52
• DOI: https://doi.org/10.1108/20421161111107840
• Keywords: Financial disclosure; Voluntary disclosure; Firm value; Enterprise value; Emerging markets; Egypt
• Public URL: https://rgu-repository.worktribe.com/output/1358344