Corporate Governance in Alternative Investment Market (AIM) Companies: Determinants of Corporate Governance Disclosure

35 Pages Posted: 16 Jan 2009

See all articles by Chris Mallin

Chris Mallin

Norwich Business School, University of East Anglia; University of Birmingham - Birmingham Business School

Kean Ow-Yong

University of Birmingham - Birmingham Business School

Date Written: January 12, 2009

Abstract

This study examines the relationship between company and market-related variables, and the disclosure level of voluntary corporate governance practice in the UK's Alternative Investment Market (AIM) companies.

AIM is a market that has grown rapidly in the last decade, attracting companies from around the world. It has a 'lighter touch' regulatory regime which has made it more attractive for companies seeking their first listing, or companies seeking an overseas listing in a well-respected market.

Using a sample of 300 financial reports and accounts of AIM companies, we carry out regression analysis which indicates that age, company size, board size and the presence of turnover (i.e. the company is active) are positively associated with the adoption, and disclosure, of recommended governance practice. Our study also reveals that more highly geared AIM companies tend to make less disclosure. Overall, our findings suggest that the internal dynamics of AIM companies exert a greater influence on voluntary corporate governance disclosures than do market-related factors.

We contribute to the literature on AIM companies and corporate governance in two main ways. First, we provide evidence on the extent of disclosure of corporate governance by AIM companies, an area where research has been largely absent. Secondly, we provide some insights into which company-level and market-related variables may be significant to corporate governance disclosure. Our findings have implications not just for the UK but also for overseas companies listed on AIM, and for countries who either have, or are considering introducing, a similar market.

Keywords: corporate governance, voluntary disclosure, Alternative Investments Market

JEL Classification: G30, G10

Suggested Citation

Mallin, Christine and Ow-Yong, Kean, Corporate Governance in Alternative Investment Market (AIM) Companies: Determinants of Corporate Governance Disclosure (January 12, 2009). Available at SSRN: https://ssrn.com/abstract=1326627 or http://dx.doi.org/10.2139/ssrn.1326627

Christine Mallin (Contact Author)

Norwich Business School, University of East Anglia ( email )

Norwich Research Park
Norwich, NR4 7TJ
United Kingdom

University of Birmingham - Birmingham Business School ( email )

Edgbaston Park Road
Birmingham, B15 2TY
United Kingdom

Kean Ow-Yong

University of Birmingham - Birmingham Business School ( email )

Edgbaston Park Road
Birmingham, B15 2TY
United Kingdom

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