Determinants of Corporate Financial Disclosure in an Unregulated Environment: Evidence from the Early 20th Century

48 Pages Posted: 2 Mar 2008 Last revised: 7 Jan 2009

See all articles by Wouter Van Overfelt

Wouter Van Overfelt

affiliation not provided to SSRN

Ann Vanstraelen

Maastricht Accounting and Auditing Research and Education Center (MARC); Maastricht University

Marc Deloof

University of Antwerp; Antwerp Management School

Date Written: January 2009

Abstract

We investigate the determinants of corporate financial reporting in an unregulated setting. Prior to World War I, limited liability companies in Belgium were obliged to publish financial statements, but financial reporting was virtually unregulated. Investor protection was generally very poor. Nevertheless, Belgian stock markets were booming. While the amount of information disclosed in the financial statements was generally low relative to the current levels of disclosure, there was significant variation in financial reporting across firms. Our results suggest that financial reporting was significantly affected by universal bank affiliations, bond financing and stock returns. Dividends were a substitute for income statement transparency.

Keywords: financial disclosure, financial reporting regulation, investor protection, bank relationships, pre-World War I Belgium

JEL Classification: M41, M48, N23, N43, G30

Suggested Citation

Van Overfelt, Wouter and Vanstraelen, Ann and Deloof, Marc, Determinants of Corporate Financial Disclosure in an Unregulated Environment: Evidence from the Early 20th Century (January 2009). European Accounting Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1099860 or http://dx.doi.org/10.2139/ssrn.1099860

Wouter Van Overfelt

affiliation not provided to SSRN ( email )

Ann Vanstraelen

Maastricht Accounting and Auditing Research and Education Center (MARC) ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

Marc Deloof (Contact Author)

University of Antwerp ( email )

Prinsstraat 13
Faculteit TEW
Antwerpen, 2000
Belgium
+32 3 265 41 69 (Phone)
+32 3 265 47 99 (Fax)

HOME PAGE: http://https://www.uantwerpen.be/en/staff/marc-deloof/

Antwerp Management School ( email )

Het Brantijser
Sint-Jacobsmarkt 9-13
Antwerp, 2000
Belgium

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