Voluntary Disclosure of Corporate Strategy: Determinants and Outcomes - An Empirical Study into the Risks and Payoffs of Communicating Corporate Strategy

214 Pages Posted: 27 Nov 2011 Last revised: 20 Oct 2014

See all articles by Piet Hein Coebergh

Piet Hein Coebergh

University of Applied Sciences Leiden

Date Written: October 24, 2011

Abstract

Business leaders increasingly face pressure from stakeholders to be transparent. There appears however little consensus on the risks and payoffs of disclosing vital information such as corporate strategy. To fill this gap, this study analyzes firm-specific determinants and organisational outcomes of voluntary disclosure of corporate strategy. Stakeholder theory and agency theory help to understand whether companies serve their interest to engage with stakeholders and overcome information asymmetries. I connect these theories and propose a comprehensive approach to measure voluntary disclosure of corporate strategy. Hypotheses from the theoretical framework are empirically tested through panel regression of data on identified determinants and outcomes and of disclosed strategy through annual reports, corporate social responsibility reports, corporate websites and corporate press releases by the 70 largest publicly listed companies in the Netherlands from 2003 through 2008. I found that industry, profitability, dual-listing status, national ranking status and listing age have significant effects on voluntary disclosure of corporate strategy. No significant effects are found for size, leverage and ownership concentration. On outcomes, I found that liquidity of stock and corporate reputation are significantly influenced by voluntary disclosure of corporate strategy. No significant effect is found for volatility of stock. My contributions to theory, methodology and empirics offers a stepping-stone for further research into understanding how companies can use transparency to manage stakeholder relations.

Keywords: Voluntary disclosure, corporate strategy

JEL Classification: M41

Suggested Citation

Coebergh, Piet Hein, Voluntary Disclosure of Corporate Strategy: Determinants and Outcomes - An Empirical Study into the Risks and Payoffs of Communicating Corporate Strategy (October 24, 2011). Available at SSRN: https://ssrn.com/abstract=1965029 or http://dx.doi.org/10.2139/ssrn.1965029

Piet Hein Coebergh (Contact Author)

University of Applied Sciences Leiden ( email )

Zernikedreef 11
Postbus 2300
Leiden, 2300 AJ
Netherlands

HOME PAGE: http://www.hsleiden.nl/english

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