Reference : Firm geographic location and voluntary disclosure
Scientific journals : Article
Business & economic sciences : Accounting & auditing
Firm geographic location and voluntary disclosure
Derouiche, Imen mailto [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA) >]
Journal of Multinational Financial Management
Elsevier Science
[en] Geography ; firm location ; volontary disclosure
[en] This study aims to shed light on the effect of a firm’s geographic location on its voluntary disclosure policy. It hypothesizes that a firm’s geographic distance from metropolitan areas increases the cost of oversight of managerial actions, which creates incentives for remotely located firms to make more voluntary disclosures in their annual reports that improve information available to investors and hence mitigate agency conflicts. Based on a sample of 260 French listed firms spanning the period 2007 to 2010, we find support for our hypothesis that as a firm’s distance from the Paris region increases, its level of voluntary disclosure in annual reports increases as well. This is consistent with the notion that remote firms are likely to pre-commit to higher voluntary disclosure so as to reduce oversight costs arising from geographic remoteness and mitigate agency conflicts. Our results are robust to alternative measures of voluntary disclosure, to several geographic location proxies, and to alternative estimation techniques. Collectively, they confirm the positive effect of distance on the extent of voluntary disclosure.
Researchers ; Professionals ; Students

File(s) associated to this reference

Fulltext file(s):

Open access
geographic location and voluntary disclosure.pdfPublisher postprint443.47 kBView/Open

Bookmark and Share SFX Query

All documents in ORBilu are protected by a user license.