This paper aims to identify new determinants of the extent of voluntary segment disclosure by using the theoretical framework of the proprietary costs theory, which states that companies limit voluntary disclosure because of proprietary costs, such as preparation and competitive costs. On the basis of the existing literature on this theory and on segment reporting, three hypotheses are theoretically derived, each correlating the level of segment disclosure to a new determinant, specifically the correspondence between the segments and legally identifiable sub-groups of companies, the growth rate and the listing status age. The paper also provides further evidence to test the impact of some 'traditional' determinants, introduced in the study as control variables. The hypotheses formulated are empirically verified. The analysis is carried out with reference to Italy, because of its limited legal and professional provisions on the topic. For the empirical test, a sample of sixty-four Italian listed companies is selected and a multiple regression model is used. Results show that, except for the growth rate, the two other new determinants are significantly related to the extent of segment disclosure. These findings confirm that proprietary costs are particularly relevant and limit the incentive for companies to provide segment information to the market.

Differently from prior studies that examine the role of stand-alone control systems within the relationship between owners and managers, our study investigates the correlation between two control mechanisms - voluntary disclosure and independent directors - in companies characterized by the presence of a dominant shareholder that is supposed to mitigate the classical agency problem. Based on agency theory, we hypothesize that the two mechanisms tend to coexist, since the presence of either one reduces the costs of introducing the other. Two further effects - the reputation and the domino effect - contribute to determine a positive relationship between the two mechanisms. We carried out the empirical analysis on 175 non-financial Italian listed companies, all controlled by a dominant shareholder. Voluntary disclosure is measured through three alternative disclosure indexes. Independent directors are identified not only according to a formal/legal definition, but also through stricter criteria. The empirical test is based on a multivariate analysis controlling for size, residual ownership diffusion, leverage, profitability and labour pressure. Results support our hypothesis and are robust to alternative criteria to identify dominant shareholders. Our study contributes to a better understanding of the relationship between different control mechanisms in particular agency settings.

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Recent accounting‐related scandals have underscored the prevalence of earnings management in financial markets. This article provides empirical evidence on the motivations for earnings management in publicly listed family companies, highlighting the differences from public nonfamily firms. Basing our predictions on an analysis of the salient characteristics of family firms in both an agency and a stewardship framework, we hypothesize that family firms are less sensitive to income‐smoothing motivations than are nonfamily firms, while they are similarly motivated to manage earnings for debt‐covenant and leverage‐related reasons. We test our hypotheses by looking at a specific accrual, R&D cost capitalization, where statistical tests confirm our hypothesized relationships.

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