The effects of corporate disclosure on firm value and firm performance: evidence from Turkey

Temiz, Hüseyin

doi:10.1108/imefm-06-2020-0269

Cited by 19 publications

(29 citation statements)

References 63 publications

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“…Bae et al (2018) found that reducing information asymmetry could maintain a competitive advantage for the firm. Some studies found that firm VD has a positive and statistically significant effect on firm value (Assidi, 2020;Temiz, 2021). Based on the above discussion, the current study proposes the following hypotheses: H1.…”

Section: Theoriesmentioning

confidence: 75%

Voluntary disclosure and corporate governance: substitutes or complements for firm value?

Assidi

2023

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Purpose The purpose of this study is to examine whether voluntary disclosure (VD) and corporate governance (CG) are substitutes or complements to each other in improving firms’ value in a non-Anglo-Saxon setting, namely, France. Design/methodology/approach This study uses a sample of 990 listed firms in France from 2010 to 2020 to test the theoretical predictions. A random effect regression and two-stage least squares estimators are used to test the relationships. The results are largely robust across a number of econometric models that take into account diverse kinds of endogeneities. Findings This study reveals that VD and CG are positively associated with firm value. The finding also indicates that VD and CG work together as substitutes rather than as complements. Furthermore, the author’s evidence suggests that ownership structure and CEO characteristics are substitutive with VD in their effect on firm value. This evidence is consistent with the view that VD can add value to the firm but only under a number of conditions. Practical implications The results shed further light on how a firm could improve its value among stakeholders by designing VD and CG practices effectively. Specifically, as VD generally acts as a substitute to CG, to accomplish their optimal economic outcomes, firms need to be discerning in executing VD and governance practices. In addition, firms have strategic flexibility in constructing VD and governance practices contingent on their own settings. Policymakers, investors and managers could use these results to examine CG and VD practices in France following the implementation of new regulations. Originality/value This study extends and contributes to the mixed or equivocal evidence of the relationships between VD, CG mechanisms and firm value. It contributes to the extant literature by first providing additional evidence, which suggests value-increasing effects of better-governed and more transparent firms. Second, this study reconciles extant disparate results by suggesting that VD can substitute CG in improving firm value. These findings have profound implications for policymakers, investors and firm’s managers.

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Section: Theoriesmentioning

confidence: 75%

Voluntary disclosure and corporate governance: substitutes or complements for firm value?

Assidi

2023

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“…Secondly, application of CG guidelines reduces the level of asymmetric information by making firms disclose voluntarily, leading to higher investor confidence and lower Ke. Therefore, firms will gradually increase their VD given its benefits with asymmetric information and positively influence firm value (Temiz, 2021).…”

Section: Discussionmentioning

confidence: 99%

“…Corporate disclosure helps build trust, improves market liquidity, increases demand for corporate stocks and helps contain transaction cost that leads to lower Ke (Botosan and Plumlee, 2002; Leuz and Verrecchia, 2005; Temiz, 2021). Corporate governance (CG) includes standards, norms and practices that are disclosed to limit asymmetric information, which may also result in low external management cost (Srivastava et al , 2019) and cost of capital (Chen et al , 2009).…”

Section: Introductionmentioning

confidence: 99%

Voluntary disclosure-cost of equity nexus and the moderating role of corporate governance: evidence from an extremely politically unstable context

Alia

Abdeljawad

Jallad

et al. 2022

IMEFM

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Purpose Higher degree of and commitment to voluntary disclosure (VD) and corporate governance (CG) helps contain information asymmetry, leading to lower cost of equity (Ke). This study provides evidence on the nexus among VD, CG, and Ke from a context characterized by extreme political instability. Design/methodology/approach This study uses all non-bank companies listed with the Palestine Exchange during 2009–2018. The level of VD was estimated by using a checklist of 35 items modified for the context of Palestine. A second checklist with 19 items was used to measure the commitment of the Palestinian companies with CG requirements. Five proxies for Ke were tested: three ex-ante Capital Asset Pricing Model-like proxies and two ex-post realized return proxies. Findings The findings state that the VD negatively impacted Ke. Interaction effect of CG and VD helps reduce the Ke. As such, for firms with better CG, the increase in VD decreases the Ke more than their standalone effect. For control variables, leverage, size and growth of firms exhibited positive impacts on Ke, whereas quality of auditors found a negative connection. Practical implications Managers in similar context, like Palestine, may prefer flexibility of smaller size and adopt conservative growth strategies to cope with adverse events. Firms adopt CG and VD as complementary forces to tackle instability and market expectation. Originality/value Studies connecting VD-CG-Ke nexus from similar context are rare. Results of this study forward that emphasis on disclosure and governance practices will help boost the confidence of the investors, reduce the Ke and create an incentive for more investment.

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“…According to Saygili et al (2021); Rawal et al (2022), Furthermore, Zaman et al (2018) identified voluntary disclosure as one of the corporate governance strategies that can improve operating performance. Temiz (2021) found no link between transparency and financial performance; however, Ararat et al ( 2017 Based on the agency theory, CG is a significant strategic practise in minimising agency difficulties such as agent opportunism, information asymmetry, and divergent attitudes of agents and other stakeholders toward risks and agency costs to improve financial performance (Salem, 2019;Shaji & Shajahan, 2020;He, 2021), as well as depending on the Resource Dependence Theory (RDT), which indicates that an organization's performance is influenced by its resources. In light of the contradictory findings about the impact of Transparency and disclosure on financial performance, the following hypothesis is proposed in this paper: Hypothesis 3 (H3).…”

Section: Transparency and Disclosure And Financial Performancementioning

confidence: 99%

The Moderating Role of Organizational Culture on the Relationship between Corporate Governance Dimensions and Financial Performance in Saudi Manufacturing Industry: A Theoretical Framework

Aldriweesh¹,

Zakuan²,

Bajuri³

et al. 2022

IJARAFMS

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Corporate governance (CG) is critical in developing a corporate culture of awareness, transparency, and openness. Despite this, previous studies have not yet reached an agreement on the most important dimensions of CG implementation and their correlation with the financial performance of financial and non-financial companies, and there is a scarcity of studies that examined variables such as organisational culture (OC) that could improve CG implementation and their relationship with firm financial performance, particularly in developing countries. This paper provides a brief overview of the dimensions of CG implementation, which are board properties, audit committee characteristics, and transparency and disclosure as the most important dimensions of CG implementation, and their impact on financial performance in developing-country manufacturing firms. Furthermore, the purpose of this study is to look into the role of OC as a moderating variable in the relationship between the implementation of CG dimensions (board properties, audit committee characteristics, and transparency and disclosure) and the financial performance of manufacturing firms in developing countries. A conceptual model was developed for this study based on previous literature, revealing that there is a theoretical correlation between board properties, audit committee characteristics, and transparency and disclosure as main dimensions of CG implementation and financial performance in developing countries' manufacturing firms, most notably, this study also theoretically demonstrated the role of OC as a primary determinant in affecting the association between CG dimension implementation and financial success in manufacturing enterprises in developing countries. However, to explore correlations in the suggested model, these theoretical conclusions require a survey of a sample of executive directors in manufacturing enterprises in a developing country such

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The effects of corporate disclosure on firm value and firm performance: evidence from Turkey

Cited by 19 publications

References 63 publications

Voluntary disclosure and corporate governance: substitutes or complements for firm value?

Voluntary disclosure and corporate governance: substitutes or complements for firm value?

Voluntary disclosure-cost of equity nexus and the moderating role of corporate governance: evidence from an extremely politically unstable context

The Moderating Role of Organizational Culture on the Relationship between Corporate Governance Dimensions and Financial Performance in Saudi Manufacturing Industry: A Theoretical Framework

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