Tone disclosure and debt financing: Empirical study from the banking sector governance
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Salah Kayed 
, Abdulhadi H. Ramadan , Amer Morshed , Mohammed Hassan Makhlouf , Ahmad Khaled Abdelhafez Awamleh
This work is licensed under a Creative Commons Attribution 4.0 International License.
Abstract
This research examines the relationship between tone disclosure (TD) and debt financing (DF) in the Jordanian banking sector between 2010 and 2019. This research uses the agency theory since it explains TD behavior to reduce information asymmetry and conflict of interest. Based on this theory, the first hypothesis suggests a positive association between TD and DF. Furthermore, the second hypothesis suggests a bidirectional relationship between TD and DF. The sample consists of 15 banks in the Jordanian banking sector. This research calculates TD by dividing the number of positive words by the total number of words. Results show a positive relationship between TD and DF, and the relationship is bidirectional (Hui et al., 2024; Zhu et al., 2023), which proves our two hypotheses. The study results help external financial statement users, mainly financers, understand the use of TD in the annual report in Jordan, one of the emerging countries. Also, the results recommend using TD in a bank’s annual report to attract more debt financers.
Keywords: Tone Disclosure, Debt Financing, Jordanian Banking Sector, Agency Theory
Authors’ individual contribution: Conceptualization — S.K. and A.H.R.; Methodology — A.H.R. and A.M.; Software — A.M.; Validation — M.H.M.; Formal Analysis — A.H.R.; Investigation — A.K.A.A.; Resources — S.K. and A.H.R.; Data Curation — A.M.; Writing — Original Draft — S.K. and A.H.R.; Writing — Review & Editing — S.K., A.H.R., A.M., and M.H.M.; Visualization — A.M.; Supervision — M.H.M.; Project Administration — M.H.M.; Funding Acquisition — A.M.
Declaration of conflicting interests: The Authors declare that there is no conflict of interest.
JEL Classification: G21, G32, M41
Received: 17.04.2024
Revised: 28.07.2024; 28.01.2025
Accepted: 10.02.2025
Published online: 12.02.2025
How to cite this paper: Kayed, S., Ramadan, A. H., Morshed, A., Makhlouf, M. H., & Awamleh, A. K. A. (2025). Tone disclosure and debt financing: Empirical study from the banking sector governance [Special issue]. Journal of Governance & Regulation, 14(1), 277–285. https://doi.org/10.22495/jgrv14i1siart4
