Voluntary disclosure frequency and cost of debt: an analysis in the Tunisian context

Talbi, Dorra; Omri, Mohamed Ali

doi:10.1504/ijmfa.2014.064521

Cited by 15 publications

(11 citation statements)

References 12 publications

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“…Our results are consistent with previous studies arguing a negative association between information disclosure and the cost of debt capital with particular reference to voluntary disclosure (Abdi & Omri, 2020; Chen & Jian, 2006; Francis et al, 2005; Guidara et al, 2014; Lopes & De Alencar, 2010; Orens et al, 2010; Talbi & Omri, 2014), financial disclosure (Amrah & Hashim, 2020; Bonsall & Miller, 2017; Muttakin et al, 2020; Sengupta, 1998), corporate political disclosure (DeBoskey et al, 2017), CSR disclosure (Chi et al, 2020; Shad et al, 2020; Xu et al, 2019), environmental disclosure (Fonseka et al, 2019; Luo et al, 2019), carbon emissions disclosure (Kleimeier & Viehs, 2018), social disclosure (Najah & Jarboui, 2013), intellectual capital disclosure (Orens et al, 2009), and finally integrated reporting (Gerwanski, 2020; Muttakin et al, 2020).…”

Section: Discussionsupporting

confidence: 93%

Extending the benefits of ESG disclosure: The effect on the cost of debt financing

Raimo

Caragnano

Zito

et al. 2021

Corp Soc Responsibility Env

254

129

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In recent years, greater attention has been paid to sustainability issues. Companies have received increasing pressure from stakeholders to adopt sustainable behavior and provide an adequate representation of sustainability practices. Nonfinancial disclosure has thus taken on a crucial role. In the academic field, several researchers have analyzed the effects of nonfinancial disclosure. However, limited attention has been paid to the impact of nonfinancial information on the cost of debt. This study aims at bridging this gap by analyzing the effect of ESG disclosure on the cost of debt. The fixed effects analysis conducted on a sample of 8264 observations (an unbalanced panel data of 919 firms for the period 2010-2019), shows a negative effect of the ESG disclosure on the cost of debt financing. The results demonstrate that companies with greater levels of transparency in the dissemination of ESG information benefit from accessing third party financial resources at better conditions.

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Section: Discussionsupporting

confidence: 93%

Extending the benefits of ESG disclosure: The effect on the cost of debt financing

Raimo

Caragnano

Zito

et al. 2021

Corp Soc Responsibility Env

254

129

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“…Guidara et al (2014) confirmed the negative effect of voluntary information on the cost of debt, adding however that timely disclosure exercises a non-significant effect. Talbi and Omri (2014) went beyond the analysis of the content and examined the effect of the frequency of voluntary disclosure on the cost of debt, finding a negative relationship. Unlike the other studies, Wang et al (2008) found a non-significant relationship between voluntary disclosure and the cost of debt.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Integrated reporting quality and cost of debt financing

Caragnano

Mariani

Vitolla

2021

JAAR

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PurposeIn recent years, policymakers have increasingly pushed firms to disclose non-financial information. In Europe, integrated reporting (IR) is an increasingly adopted tool to fully comply with the requirements of the Directive 2014/95/EU. This study aims to examine the financial benefits of IR quality and specifically the effect on the cost of debt.Design/methodology/approachA manual content analysis is performed to measure the quality of the information contained in integrated reports. A panel regression model is used to test the effect of the IR quality on the cost of debt on a sample of 399 observations (a balanced panel of 133 European listed firms for the period 2017–2019).FindingsResults demonstrate a negative relationship between IR quality and the cost of debt, showing that firms that provide higher quality integrated reports benefit from access to third party financial resources at better conditions.Research limitations/implicationsThe results of this study offer important implications for managers and policymakers. The capacity of IR quality to allow a cost of debt reduction should push managers to a greater propensity towards transparency and the dissemination of high quality integrated reports. In addition, in light of the benefits connected to the IR quality, policymakers should push towards the adoption of IR as a solution to fulfil the regulatory obligations deriving from Directive 2014/95/EU.Practical implicationsResults show the goodness of IR as an ideal solution to fulfil the obligations imposed by Directive 2014/95/EU. The important financial benefits associated with IR quality make the high quality integrated report an ideal tool capable of fulfilling regulatory obligations and at the same time guaranteeing a reduction in the cost of debt.Originality/valueTo the best of the authors’ knowledge, this is the first work that analyses the relationship between IR quality and cost of debt.

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“…The shift in the voluntary disclosure equilibrium increases the liquidity of banks' shares. In the last decade, a number of studies about voluntary disclosures were also conducted in developing countries such as Malaysia (Mohd Ghazali and Weetman, 2006), Kuwait (Al-Shammari, 2008), Turkey (Uyar et al, 2013), Iran (Sadegh et al, 2013), Egypt (El Assy, 2015 and Tunisia (Talbi and Omri, 2014).…”

mentioning

confidence: 99%

The role of audit quality on market consequences of voluntary disclosure

Wardhani

2019

ARA

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Purpose The purpose of this paper is to investigate the role of the auditor in enhancing the market consequences of voluntary disclosure in East Asian countries that have different reporting environments. This study also investigates the effect of quality of the reporting environment on the role of the auditor in enhancing market consequences of voluntary disclosure. Design/methodology/approach The methodology used in this research is multiple regressions using the least square method. This research uses East Asian countries context that covers India, Indonesia, Japan, Malaysia, the Philippines, Singapore and Thailand with cross-sectional data during 2016. This research uses four measurements of market consequences, namely, cumulative abnormal return (CAR), volatility of return, bid-ask spread and trading volume. Findings The results show that voluntary disclosure gives positive consequences to the capital market by increasing the CAR, volatility of return and average trading volume, and decreasing asymmetric information. The results also show that auditor plays a significant role in increasing the credibility of voluntary disclosure by increasing the market consequences of disclosure. The role of the auditor in increasing the effect of voluntary disclosure is higher in a country that adopts international best practice in financial reporting. Research limitations/implications The findings of this study need to be interpreted with caution due to several limitations. Although the measurement of voluntary disclosure used in this study is relatively more complete compared to previous research, there are still much voluntary information disclosed that are not included in the checklist. Moreover, this study only considers voluntary disclosure in the annual report. Therefore, future studies can develop a more comprehensive measurement of voluntary disclosure and use sources of information beyond the annual report. Practical implications This study shows that in a reporting environment that is less transparent as in the conditions of countries in East Asia, voluntary disclosure and the role of the auditor in increasing value of voluntary disclosure for market participants is crucial. Companies need to increase their voluntary disclosures as they become additional provisions in improving the reporting environment and consider the result of this study when choosing the auditor. Second, audit quality is more important in increasing the credibility of voluntary disclosure in countries that adopt international best practices in financial reporting. The result of this study implies that audit quality is a complementary mechanism of the reporting environment. Originality/value This study expands the literature of the role of the auditor on the market consequences of voluntary disclosures and explores the role of the auditor in different reporting environment across countries in East Asia. This study shows that auditor increases the credibility of voluntary disclosure in the different context of accounting and auditing practices.

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Voluntary disclosure frequency and cost of debt: an analysis in the Tunisian context

Cited by 15 publications

References 12 publications

Extending the benefits of ESG disclosure: The effect on the cost of debt financing

Extending the benefits of ESG disclosure: The effect on the cost of debt financing

Integrated reporting quality and cost of debt financing

The role of audit quality on market consequences of voluntary disclosure

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