The Effects of Corporation/Country Characteristics and the Level of Corporate Governance on Corporate Risk Disclosure: The Case of the Gulf Cooperative Council (GCC) Countries

43 Pages Posted: 5 May 2013 Last revised: 14 Jan 2019

See all articles by Abed Al-Nasser Abdallah

Abed Al-Nasser Abdallah

American University of Sharjah

Mostafa Kamal Hassan

Alexandria University; University of Alexandria, Egypt; Qatar University

Date Written: May 3, 2013

Abstract

This paper explores corporate risk disclosure (CRD) in the Gulf Cooperative Council (GCC) countries and its relation to different firm’s characteristics, level of corporate governance and country of origin. Employing content analysis we searched the 2008 annual reports of 424 GCC publicly listed firms for 45 types of CRD. Using univariate and multivariate analyses, we report a positive relation between CRD and the firm’s size, leverage, and number of years using IFRS. We also find that financial and non-Islamic financial institutions disclose more risks than other firms in the sample. Using the BASIC score, which is a corporate governance index developed by the National Investor (TNI) in collaboration with HAWKAMAH (The Institute of Corporate Governance in the UAE), we find a positive relation between the firm’s level of corporate governance and CRD. Interestingly, we document an increase in the level of CRD with more corporate communication and disclosure. Compared to prior literature (e.g. Dobler et al, 2011), our paper is unique because it is the first to explore the relation between CRD and IFRS, the difference in CRD between Islamic and conventional financial institutions, and most importantly, the impact of corporate governance and corporate communication on CRD.

Keywords: Corporate Risk Disclosure, Corporate Governance, IFRS, GCC

JEL Classification: G38, M40, M41

Suggested Citation

Abdallah, Abed Al-Nasser and Hassan, Mostafa Kamal, The Effects of Corporation/Country Characteristics and the Level of Corporate Governance on Corporate Risk Disclosure: The Case of the Gulf Cooperative Council (GCC) Countries (May 3, 2013). Available at SSRN: https://ssrn.com/abstract=2260537 or http://dx.doi.org/10.2139/ssrn.2260537

Abed Al-Nasser Abdallah (Contact Author)

American University of Sharjah ( email )

United Arab Emirates
+971 6 515 2594 (Phone)

Mostafa Kamal Hassan

Alexandria University ( email )

El-Guish Road
El-Shatby
Alexandria, 21321
Egypt

University of Alexandria, Egypt ( email )

Qatar University ( email )

Doha
Doha
Doha, 2371
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