Drivers of corporate disclosure: a structural equation analysis in a Central European setting

Abstract

Purpose

The purpose of this paper is to develop a network of interlinked hypotheses about determinants of corporate disclosure in Central Europe – especially in Germany and Poland – and evaluate it empirically.

Design/methodology/approach

The hypotheses network is developed from literature and evaluated with structural equation modeling. Sixty annual reports from Germany and Poland have been examined using an enhanced version of the PRISM‐project content analysis approach with 118 items.

Findings

Firm size and industry do not directly influence corporate disclosure but are mediated by crosslisting. The home country effect is of a direct and indirect nature with the latter being mediated by firm size and crosslisting.

Research limitations/implications

Manual content analysis of reports limits validity, reliability, sample and country focus. Further research needs to address additional factors influencing corporate disclosure.

Practical implications

Companies’ disclosure quality seems to profit the most from crosslisting activities as then listing requirements of several stock exchanges have to be fulfilled simultaneously.

Originality/value

By the rare application of structural equation analysis in corporate disclosure literature secondary effects that are mediated by crosslisting and have a strong influence on corporate disclosure are analyzed. These indirect relations of industry, country, and firm size are even stronger than the direct ones that are intensively discussed in the literature.

Citation

Grüning, M. (2007), "Drivers of corporate disclosure: a structural equation analysis in a Central European setting", Management Research News, Vol. 30 No. 9, pp. 646-660. https://doi.org/10.1108/01409170710779962