Impact of corporate governance and institutional context on multilatinas’ reporting quality

Abstract

Purpose This study aims to identify the impacts of corporate governance (CG) and institutional context on multilatinas’ corporate reporting quality (CRQ). CG and institutional context facilitate the reduction of agency problems and the existence of accountability processes that minimize information asymmetries. Design/methodology/approach A panel data model was developed from a sample of 77 multilatinas studied during the 2014–2020 period. Different estimations were carried out through the panel data model to identify the impact of CG and institutional context on CRQ. Findings It is evidenced that appropriate CG structure has a positive impact on multilatinas’ CRQ. In addition, each country’s regulatory quality is confirmed to have a positive effect on firms to produce higher-quality reports. Practical implications This research provides empirical support to what is put forward by agency and stakeholder theory regarding the role that CG and institutional context play in reducing information asymmetries and improving accountability processes to all stakeholders in the Latin American context. Originality/value This study contributes original results to the existing literature. Unlike previous works, the present research analyzed multilatinas facing social and political contexts that differ from those of multinationals from developed countries. Different ways of reporting were also covered, going beyond traditional ways of evaluating CRQ – which generally take the sustainability report as a basis.

The Regulatory Quality and ESG Model at World Level

“…[2], [3], [16], [17], [22], [9], [23], [27] RQ, Environment and Energy [5], [6] , [10], [11], [24], [26] Miscellaneous [7], [13], [14], [18] RQ, Social and Demographic Issues [19], [20]…”

The Regulatory Quality and ESG Model at World Level

“…Countries with higher levels of RQ recovery faster in case of financial distress [17]. There is a positive relationship between RQ and the ability of multi-Latinas to produce quality accounting reports in the period 2014-2020 for a sample of 77 corporations [18]. RQ promotes financial inclusion and inclusive growth in Nigeria [19].…”

“…Synthesis of the Literature Review by Main Themes RQ , Economic Growth and Development [1], [8], [12], [15], [21], [4], [25] RQ, Financial Sector and Financial Markets [2], [3], [16], [17], [22], [9], [23], [27] RQ, Environment and Energy [5], [6] , [10], [11], [24], [26] Miscellaneous [7], [13], [14], [18] RQ, Social and Demographic Issues [19], [20] 3. We find that the level of Regulatory Quality is positively associated to the following variables i.e.…”

MNEs’ corporate governance disclosure: a strategic response to corrupt environments

“…In Latin America, the regulatory frameworks for corporate governance are yet to be fully developed (Correa-Mejía, 2022; Gedan and Canton, 2022; Jesuka and Peixoto, 2021). Consequently, we believe the efforts to improve the combat against the corruption in some region countries do not offer a solid alternative explanation for H2 .…”

“…There are advancements in the quantity and quality of disclosing CG-related information by MNEs (Kaymak and Bektas, 2017); however, these advancements are not followed by theoretical developments on what accounts for differences across MNEs in disclosing CG-related information (Ali et al , 2017). While many studies explore why MNEs disclose environmental, social or economic information (Blanc et al , 2019; Ellimäki et al , 2019), studies on the disclosure of information on the mechanisms designed for smoothing the agency issues are scarce in the current literature (Correa-Mejía, 2022). Also, the disclosure of CG-related information still falls short of what is needed to protect the MNEs’ stakeholders’ rights (Kamal, 2021; Raimo et al , 2021; Reinecke and Donaghey, 2021; Zattoni and Pugliese, 2021).…”