Firm-Level Disclosures and the Relative Roles of Culture and Legal Origin
Author | : Ole-Kristian Hope |
Publisher | : |
Total Pages | : 36 |
Release | : 2003 |
ISBN-10 | : OCLC:1290392573 |
ISBN-13 | : |
Rating | : 4/5 ( Downloads) |
Download or read book Firm-Level Disclosures and the Relative Roles of Culture and Legal Origin written by Ole-Kristian Hope and published by . This book was released on 2003 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: Researchers have long been interested in studying firms' disclosure practices and what factors shape these practices. Accounting research has traditionally been interested in the role culture plays in a variety of financial reporting settings, including financial disclosure. Recent literature has focused more on the effects of variations in legal institutions internationally. In this paper, I investigate the relative roles of legal origin and national culture in explaining firm-level disclosure levels internationally. Using a significantly larger and more representative sample than prior research, I document, using univariate and multivariate analyses, that both legal origin and culture (as operationalized by Hofstede and Schwartz) are important in explaining firm disclosure. Neither legal origin nor culture dominates with respect to overall explanatory power for variations in disclosure levels. Consequently, it is premature to write off culture as an important factor in the financial reporting environment. Furthermore, I find that legal origin is an important conditioning variable for the role of culture. Finally, although legal origin is a key determinant of disclosure levels, I hypothesize and find that its importance decreases with the richness of a firm's information environment.