The value relevance of disclosure: Evidence from the emerging capital market of Egypt

Abstract

This study examines the value of voluntary and mandatory disclosure in a market that applies International Accounting Standards (IAS) with limited penalties for noncompliance. The lack of enforcement creates an element of choice in the level of mandatory disclosure by companies. Using panel data analysis, our empirical results show that, after controlling for factors such as asset size and profitability, mandatory disclosure has a highly significant but negative relationship with firm value. This result, although puzzling from a traditional perspective, is consistent with the predictions of analytical accounting models, which emphasise the complex interplay of factors determining disclosure effects. Our results also show that voluntary disclosure has a positive but insignificant association with firm value. This lack of statistical significance supports the view that there is a complex interplay of different factors determining the relationship between disclosure and firm value.

Firm’s Information Environment and Stock Liquidity: Evidence from Tunisian Context

“…This result is similar to that of Hassan et al (2009), who find no effect of voluntary information disclosure on Egyptian firms' value.…”

“…However, in emerging markets, empirical studies are divided and their results are not conclusive: Hassan et al (2009), Wang et al (2008) and Chen et al (2009) show that there is no significant effect of the corporate information disclosure neither on the firm's value nor on financing cost (debt and equity). Gana and Chemli (2008) find that stock liquidity decreases with the level of information disclosure.…”

Commercial Banks’ Attributes and Annual Voluntary Disclosure: The case of Libya

“…This value of adjustedR² compares with that obtained in the prior relevant disclosure studies. It is higher than Hossain and Taylor (2007) at 24%, Hossain and Reaz (2007) at 25%,Agyei-Mensah (2012) at 8%, but the explanatory power of this model is lower than Hassan et al (2009) in respect of non-financial companies (87.3%). A detailed discussion of the further regression result on the basis of research hypotheses is presented in the following paragraphs.…”

Extra-financial Analysis of IFRS Adoption and Application in Developing Country: The Case of Indonesia

“…Several researchers (Zeghal & Mhedhbi, 2006;Hassan, 2009;Gyasi, 2010;Mohamed, 2014) all argued that international accounting harmonization is beneficial for developing countries because it provides them with better-prepared standards as well as the best quality accounting framework and principles. However, others such as Cerne (2009) mentioned that the accounting information produced according to developed countries' accounting systems is not relevant to the decision models of emerging economics.…”