International Capital Market Pressures and Voluntary Annual Report Disclosures by U.S. and U.K. Multinationals

Gray, Sidney J.; Meek, Gary K.; Roberts, Clare

doi:10.1111/j.1467-646x.1995.tb00049.x

Cited by 180 publications

(144 citation statements)

References 28 publications

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“…Lev and Sougiannis (1996) developed a model relating companies' earnings (output) to their investment inputs, including expenditures on R&D. The authors reported that the average duration of R&D benefits varies across industries from five to nine years and the estimated benefits of these R&D programs vary from $1.66 to $2.63 per dollar of R&D spending. Gray et al, (1995) confirmed a positive significant relationship with the voluntary disclosure of 64 UK and 116 USA companies and R&D information. R&D is defined as all direct and indirect costs related to the creation and development of new processes, techniques, applications and products with commercial possibilities.…”

Section: Hypotheses and Research Designsupporting

confidence: 54%

“…The first theoretical approach proposed by this paper is agency theory that may explain management behaviour when objectives are not aligned with those of shareholders (Barako, Hancock, & Izan, 2006;Berle & Means, 1934;Cheney & Carroll, 1997;Jensen & Meckling, 1976). The second theoretical approach is signalling theory (Spence, 1973;Akerlof, 1970) in which management need to decide on whether the voluntary IC attributes are associated with disclosure costs that take the form of proprietary costs (Dye, 1985;Gray, Meek, & Roberts, 1995;Verrecchia, 1983). The existence of proprietary costs generally leads to minimal or no disclosure however, the existence of mitigating circumstances such as barriers to entry may lead to partial disclosure of IC attributes.…”

Section: Analytical Framework and Literature Reviewmentioning

confidence: 99%

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Investment in Employees and Research and Development and the Signalling of Intellectual Capital by UK Listed Companies

Mkumbuzi¹

2015

ASS

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This paper examines the cross-sectional effect of investment in employees and investment in research and development on the extent of voluntary disclosure of intellectual capital of 443 FTSE All Share Index companies for the year 2003/2004. The extent of disclosure is measured by a disclosure index based on intellectual capital attributes included in the narratives and illustrations of the annual reports. The paper predicts that agency costs may be minimised through voluntary disclosure. In addition, that in some industries, the benefits of signalling valuable, rare, inimitable and non-substitutable attributes may outweigh the competitive costs of reporting this information. The results suggest that large companies operating in non-manufacturing, high-tech and innovative industries that are characterised by investment in employees and research and development processes have higher levels of hidden value; these companies are associated with the signalling of intellectual capital.

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Section: Hypotheses and Research Designsupporting

confidence: 54%

Section: Analytical Framework and Literature Reviewmentioning

confidence: 99%

Investment in Employees and Research and Development and the Signalling of Intellectual Capital by UK Listed Companies

Mkumbuzi¹

2015

ASS

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“…In relation to voluntary disclosure the differentiation is a matter of certain companies deciding to disclose more financial information (e.g., Gray, Meek and Roberts, 1995;Renders and Gaeremynck, 2007) and/or non-financial information (e.g., Berglöf and Pajuste, 2005;Eng and Mak, 2003) than other companies. Paradoxically, the companies are trying to be exceptional by making reporting decisions which make them similar in a global environment.…”

Section: Differentiation In a Harmonisation Environmentmentioning

confidence: 99%

Board Competency Explanations for Differentiation in a Harmonisation Environment

Holm

Schøler

2012

RES

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Some companies decide to differentiate from others even though the regulatory establishments such as the European Union and IASB constantly strive to encourage comparability and the need for harmonisation of reporting behaviour and governance structures. Under the harmonization regime, decisions to differentiate become strategic in nature and are placed in the hands of the (supervisory) board. We examine the influence of the competency and background of supervisory board members on decisions to differentiate in reporting and governance structure. We use data from 100 listed Danish companies. We find that early IFRS implementation is related to board competency in the form of international experience, while corporate governance disclosure level is related to internationalisation, professional background in accounting/finance and gender diversity. We also find that differentiation through voluntary implementation of audit committees is related to international experience, while board decisions to abandon the Danish joint audit regime are unrelated to competency measures.

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“…Some papers use available archival metrics on disclosure rankings, e.g., AIMR data (e.g., Lang and Lundholm 1993;Healy et al 1999;Lundholm 2000 or Botosan andPlumlee 2002). Others use self-constructed scores that are based on a normative understanding of 'comprehensive' disclosures (e.g., Hossain et al 1995;Gray et al 1995;Botosan 1997;Hail 2002;Jones 2007;Grüning 2011).…”

Section: Independent Variable: Strategy Disclosure Scoresmentioning

confidence: 99%

Let’s talk strategy: the impact of voluntary strategy disclosure on the cost of equity capital

Sieber

Weißenberger

Oberdörster

et al. 2014

Bus Res

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This paper deals with the impact of voluntary strategy disclosure in management reports on the cost of equity capital. Such an impact is not obvious, as investors might consider strategy information as “cheap talk” and therefore ignore it. We analyze a sample of 100 German listed firms from 2002 to 2008, measuring strategy disclosure levels using hand-collected strategy disclosure scores. We find that higher disclosure levels are, on average, associated with lower cost of equity capital even after controlling for overall disclosure quality. The paper contributes to the field by providing evidence that voluntary strategy disclosures in firms’ management reports reduce the information asymmetry component of cost of capital and therefore can be considered as a relevant source of information for investors.

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International Capital Market Pressures and Voluntary Annual Report Disclosures by U.S. and U.K. Multinationals

Cited by 180 publications

References 28 publications

Investment in Employees and Research and Development and the Signalling of Intellectual Capital by UK Listed Companies

Investment in Employees and Research and Development and the Signalling of Intellectual Capital by UK Listed Companies

Board Competency Explanations for Differentiation in a Harmonisation Environment

Let’s talk strategy: the impact of voluntary strategy disclosure on the cost of equity capital

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