Assessment of the Impact of the Level of Disclosure of Mandatory Non-Financial Information in Public Annual Reports on the Investment Attractiveness of a Company
- Authors: Fedorova E., Grishchenko Y., Demin I., Chernova E.
- Issue: Vol 14, No 2 (2020)
- Pages: 22-34
- Section: New Research
- URL: https://journal-vniispk.ru/2073-0438/article/view/303080
- DOI: https://doi.org/10.17323/j.jcfr.2073-0438.14.2.2020.22-34
- ID: 303080
Cite item
Full Text
Abstract
In this study, we assess the influence of information disclosed by issuers in annual reports in accordance with the requirements of the Central Bank of Russia on the investment attractiveness of a company.The empirical base of the research consists of annual reports of 60 Russian issuers from various industries over 10 years. On the basis of applicable regulations of the Bank of Russia we compiled an author’s dictionary of terms (word forms). Using the methods of taking into consideration grammatical forms we calculated occurrences of the dictionary terms in the texts of annual reports. This study represents the first time that a rating of issuers on the basis of the disclosure index of mandatory non-financial information (INDEX) in accordance with the Russian legislation was made. By means of a probit regression we proved the interrelation between the disclosure index of mandatory non-financial information (INDEX) and the issuer’s investment attractiveness. Additionally, by means of a panel regression we established the interrelation between the issuer’s investment attractiveness and the level of information disclosure which characterises the issuer, its securities and dividend policy, and its risk management policy.
About the authors
E. Fedorova
Author for correspondence.
Email: ecolena@mail.ru
Y. Grishchenko
Email: pochta2807@gmail.com
I. Demin
Email: idemin@fa.ru
E. Chernova
Email: e.chernova@bk.ru
References
- Regulation on the disclosure of information by issuers of equity securities. Approved by the Bank of Russia on December 30, 2014 No. 454-P. URL: http://www.consultant.ru/document/cons_doc_LAW_175536/ (In Russ.).
- Christensen H. B., Hail L., Leuz C. Mandatory IFRS reporting and changes in enforcement. Journal of Accounting and Economics. 2013;56(2-3):147-177. doi: 10.1016/j.jacceco.2013.10.007.
- Callen J. L., Gavious I., Segal D. The complementary relationship between financial and non-financial information in the biotechnology industry and the degree of investor sophistication. Journal of Contemporary Accounting & Economics. 2010;6(2):61-76. doi: 10.1016/j.jcae.2010.09.001.
- Wang S., Wang H., Wang J., Yang F. Does environmental information disclosure contribute to improve firm financial performance? An examination of the underlying mechanism. Science of the Total Environment. 2020;714:136855. doi: 10.1016/j.scitotenv.2020.136855.
- Udaltsov V. E., Tikhonova N. M. Influence of informational transparency on the cost of capital and operational efficiency of Russian public companies. Korporativnye finansy = Journal of Corporate Finance Research. 2013;7(1):2-16. (In Russ.). doi: 10.17323/j.jcfr.2073-0438.7.1.2013.2-16.
- Al-Ahdal W. M., Alsamhi M. H., Tabash M. I., Farhan N. H. S. The impact of corporate governance on financial performance of Indian and GCC listed firms: An empirical investigation. Research in International Business and Finance. 2020;51:101083. doi: 10.1016/j.ribaf.2019.101083.
- Rezaee Z., Tuo L. Voluntary disclosure of nonfinancial information and its association with sustainability performance. Advances in Accounting. 2017;39:47-59. doi: 10.1016/j.adiac.2017.08.001.
- Mathuva D. M., Kiweu J. M. Cooperative social and environmental disclosure and financial performance of savings and credit cooperatives in Kenya. Advances in Accounting. 2016;35:197-206. doi: 10.1016/j.adiac.2016.09.002.
- Pavlopoulos A., Magnis C., Iatridis G. E. Integrated reporting: An accounting disclosure tool for high quality financial reporting. Research in International Business and Finance. 2019;49:13-40. doi: 10.1016/j.ribaf.2019.02.007.
- Moss T. W., Renko M., Block E., Meyskens M. Funding the story of hybrid ventures: Crowdfunder lending preferences and linguistic hybridity. Journal of Business Venturing. 2018;33(5):643-659. doi: 10.1016/j.jbusvent.2017.12.004.
- Pencle N., Mălăescu I. What's in the words? Development and validation of a multidimensional dictionary for CSR and application using prospectuses. Journal of Emerging Technologies in Accounting. 2016;13(2):109-127. doi: 10.2308/jeta-51615.
- Letter of the Bank of Russia dated February 17, 2016 No. IN-06-52/8 "On the disclosure in the annual report of a public joint-stock company of a report on compliance with the principles and recommendations of the Corporate Governance Code". URL: https://www.garant.ru/products/ipo/prime/doc/71237796/ (In Russ.).
- Gizatullin A. V. Corporate governance, social responsibility and financial efficiency of the company. Rossiiskii zhurnal menedzhmenta = Russian Management Journal. 2007;5(1):35-66. (In Russ.).
- Bose S., Saha A., Khan H. Z., Islam S. Non-financial disclosure and market-based firm performance: The initiation of financial inclusion. Journal of Contemporary Accounting & Economics. 2017;13(3):263-281. doi: 10.1016/j.jcae.2017.09.006.
- Kovalev V. V. The problem of terminological uncertainty in applied economics. Vestnik Sankt-Peterburgskogo universiteta. Ekonomika = St Petersburg University Journal of Economic Studies (SUJES). 2012;(1):3-19. (In Russ.).
- Bregvadze D. T., Sokolyansky V. V., Knyazeva E. V. Tobin's Q ratio as an indicator of investment attractiveness of space industry companies. Kreativnaya ekonomika = Journal of Creative Economy. 2016;10(6):543-552. doi: 10.18334/ce.10.6.35334.
Supplementary files
