Determinants of online corporate reporting in three Latin American markets

Abstract

Purpose -The purpose of this paper is to explore the determinants of online corporate reporting in three Latin American emerging markets, Argentina, Mexico and Chile, providing further evidence to test the mediation role of web presence development in the relationship between these determinants and e-disclosure. Web presence development measures the firm's efforts to archive web visibility, web usability and convenience. Design/methodology/approach -Based on a content analysis of corporate web sites, the extent of the information is measured by three internet disclosure indexes. Four constructs which are considered key drivers of a firm's disclosure strategy are identified. Structural equation modelling (SEM) was used to assess the research model. The sample contains publicly available data on listed companies' web sites. Findings -The results reveal that the development of a firm's presence on the internet is as important as its characteristics in determining corporate transparency and in mediating the relationship between firm size and cross-listing and e-disclosure. Practical implications -Companies should be aware that investors are attaching increasing importance to corporate transparency. Consequently, managers should put more effort into improving web sites, which would increase corporate visibility and open up a direct communication channel with their stakeholders. They should also take advantage of web sites to provide information, above and beyond that required by local law. Not only do current and potential investors find this useful, it also increases their confidence in the company. Originality/value -This paper proposes an integrative model of the determinants of the level of online corporate reporting using constructs that reflect their multidimensional nature. A non-financial latent variable for web presence on the internet is proposed as a mediator in the relationship between e-disclosure and traditional determinants. The SEM approach simultaneously examines the direct and indirect relationships between the proposed latent variables and how these relationships influence the level of e-disclosure. 806OIR 38,6 asymmetries between managers and stakeholders. One of the stakeholders for which companies issue corporate information is the shareholder. As soon as firms compete with each other for funds in capital markets, information on investor relations becomes essential. Greater corporate transparency improves investor protection rights and enhances the market's valuation of stocks (Klapper and Love, 2004).The increasing need for companies to send messages to the public has resulted in a sharp rise in the number of business news items and business-related media. New technologies have brought challenges and opportunities to the field of corporate communication enabling more direct, dynamic and interactive contact with stakeholders regardless of their location and without the need for intermediaries (Cormier et al., 2010). Corporate information on the internet provides benefits in cost-cutting, distribu...

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