THE EFFECT OF PRESS VISIBILITY ON VOLUNTARY DISCLOSURE: CROSS-COUNTRY EVIDENCE

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Abstract

The study investigates the effect of press coverage on voluntary disclosure in the narrative sections of annual reports of Australian and Chinese listed companies. A combination of the legitimacy theory and media agenda setting theory is employed to examine their application in the context of different country-level governance mechanisms, in particularly in Anglo-Saxon (Australia) and Asian (China) economies. The study is based on a sample of 200 listed companies and employs multiple regression analyses. The findings show that press coverage is positively and significantly associated with voluntary disclosure suggesting that closer media attention increases voluntary disclosure. The effect of press coverage is mediated by country-level governance mechanisms, suggesting stronger association in countries with stronger legal enforcement mechanisms.

Keywords: Voluntary Disclosure, Media, Agenda Setting Theory, Legitimacy Theory

How to cite this paper: Prokofieva, M., & Clark, C.(2014). The effect of press visibility on voluntary disclosure: cross-country evidence. Corporate Ownership & Control, 11(3), 72-82. https://doi.org/10.22495/cocv11i3p5