Ownership Concentration and Corporate Disclosure in Bangladesh

Posted: 10 May 2014

Date Written: March 24, 2014


This paper shows that non-compliance with the mandatory disclosure requirements is pervasive in Bangladesh. This is contrasted with the observation that audit opinion is often unqualified. Given that accounting standards and disclosure rules are weakly enforceable, corporate disclosure practice is de facto discretionary in the country. The present study thus investigates cross-sectional determinants of financial disclosure in corporate annual reports. The findings show that, controlling for factors such as age, size, profitability and financial leverage, disclosure effect of ownership concentration is negative. The findings validate the view of La Porta et al. (1999) that an increasing ownership concentration leads corporate management to adopt a disclosure regime which is biased against the external shareholders and creditors. The findings imply an information problem whereby insiders will likely expropriate outside shareholders in an environment where legal protection of the latter is weak.

Keywords: Financial disclosure, accounting regulation, corporate governance, ownership concentration, transparency, accountability

JEL Classification: G14, G18, M41, M42, M48

Suggested Citation

Rahman, Mizanur, Ownership Concentration and Corporate Disclosure in Bangladesh (March 24, 2014). Available at SSRN: https://ssrn.com/abstract=2435108 or http://dx.doi.org/10.2139/ssrn.2435108

Mizanur Rahman (Contact Author)

University of Dhaka ( email )

Department of Accounting & Information Systems
University of Dhaka
Dhaka, 1000
+88 01817684202 (Phone)
+88 2 8615583 (Fax)

HOME PAGE: http://www.acmd.com.bd

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics