Ownership Structure and Corporate Voluntary Disclosure
The International Journal of Accounting 37 (2002) 247 – 265
Ownership structure and corporate voluntary disclosure in Hong Kong and Singapore
Gerald K. Chaua, Sidney J. Grayb,* b Hong Kong Polytechnic University, Hong Kong, China School of International Business, University of New South Wales, Quadrangle Building, Sydney, NSW 2052, Australia
a
Abstract Drawing on prior empirical research based on disclosure behavior in developed western markets, this study examines the association of ownership structure with the voluntary disclosures of listed companies in the Asian settings of Hong Kong and Singapore. An analysis of annual reporting practices shows that the extent of outside ownership is positively associated with voluntary disclosures. In particular, the results also indicate that the level of information disclosure is likely to be less in ‘‘insider’’ or family-controlled companies, a significant feature of the Hong Kong and Singapore stock markets. D 2002 University of Illinois. All rights reserved.
Keywords: Voluntary disclosures; Agency theory; Hong Kong; Singapore
1. Introduction Corporate voluntary disclosure has been the focus of an increasing amount of attention in recent years. Such disclosures can be defined as ‘‘disclosures in excess of requirements, representing free choices on the part of company managements to provide accounting and other information deemed relevant to the decision needs of users of their annual reports’’ (Meek, Roberts, & Gray, 1995, p. 555). Studies in this area have mainly focused on the impact of company characteristics on the extent of voluntary disclosure. Understanding why
* Corresponding author. Tel.: +61-2-9385-6442; fax: +61-2-9385-6440. E-mail address: s.gray@unsw.edu.au (S.J. Gray). 0020-7063/02/$ – see front matter D 2002 University of Illinois. All rights reserved. PII: S 0 0 2 0 - 7 0 6 3 ( 0 2 ) 0 0 1 5 3 - X
248
G.K. Chau, S.J. Gray / The International Journal of Accounting 37 (2002)
Ownership structure and corporate voluntary disclosure in Hong Kong and Singapore
Gerald K. Chaua, Sidney J. Grayb,* b Hong Kong Polytechnic University, Hong Kong, China School of International Business, University of New South Wales, Quadrangle Building, Sydney, NSW 2052, Australia
a
Abstract Drawing on prior empirical research based on disclosure behavior in developed western markets, this study examines the association of ownership structure with the voluntary disclosures of listed companies in the Asian settings of Hong Kong and Singapore. An analysis of annual reporting practices shows that the extent of outside ownership is positively associated with voluntary disclosures. In particular, the results also indicate that the level of information disclosure is likely to be less in ‘‘insider’’ or family-controlled companies, a significant feature of the Hong Kong and Singapore stock markets. D 2002 University of Illinois. All rights reserved.
Keywords: Voluntary disclosures; Agency theory; Hong Kong; Singapore
1. Introduction Corporate voluntary disclosure has been the focus of an increasing amount of attention in recent years. Such disclosures can be defined as ‘‘disclosures in excess of requirements, representing free choices on the part of company managements to provide accounting and other information deemed relevant to the decision needs of users of their annual reports’’ (Meek, Roberts, & Gray, 1995, p. 555). Studies in this area have mainly focused on the impact of company characteristics on the extent of voluntary disclosure. Understanding why
* Corresponding author. Tel.: +61-2-9385-6442; fax: +61-2-9385-6440. E-mail address: s.gray@unsw.edu.au (S.J. Gray). 0020-7063/02/$ – see front matter D 2002 University of Illinois. All rights reserved. PII: S 0 0 2 0 - 7 0 6 3 ( 0 2 ) 0 0 1 5 3 - X
248
G.K. Chau, S.J. Gray / The International Journal of Accounting 37 (2002)