The value relevance of disclosure: evidence from the emerging capital market of Egypt.

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

Abstract

This study examines the value of voluntary and mandatory disclosure in a market that applies International Accounting Standards (IAS) with limited penalties for non compliance. The lack of enforcement creates an element of choice in the level of mandatory disclosure by companies. Using panel-data analysis, our empirical results show that, after controlling for factors such as asset size and profitability, mandatory disclosure has a highly significant but negative relationship with firm value. This result, although puzzling from a traditional perspective, is consistent with the predictions of analytical accounting models, which emphasize the complex interplay of factors determining disclosure effects. Our results also show that voluntary disclosure has a positive but insignificant association with firm value. This lack of statistical significance supports the view that there is a complex interplay of different factors determining the relationship between disclosure and firm value.

Citation

HASSAN, O.A.G., ROMILLY, P., GIORGIONI, G. and POWER, D. 2009. The value relevance of disclosure: evidence from the emerging capital market of Egypt. International journal of accounting [online], 44(1), pages 79-102. Available from: https://doi.org/10.1016/j.intacc.2008.12.005

• Journal Article Type: Article
• Acceptance Date: Jan 22, 2009
• Online Publication Date: Jan 22, 2009
• Publication Date: Mar 31, 2009
• Deposit Date: Nov 15, 2021
• Publicly Available Date: Jul 19, 2022
• Journal: International journal of accounting
• Print ISSN: 1094-4060
• Electronic ISSN: 2213-3933
• Publisher: World Scientific Publishing
• Peer Reviewed: Peer Reviewed
• Volume: 44
• Issue: 1
• Pages: 79-102
• DOI: https://doi.org/10.1016/j.intacc.2008.12.005
• Keywords: Financial disclosure; Voluntary disclosure; Mandatory disclosure; Firm value; Enterprise value; Egypt; Disclosure; Firm value; Cost of capital; Economic consequences
• Public URL: https://rgu-repository.worktribe.com/output/1358349