Non-Financial Disclosure and Market-Based Firm Performance: The Initiation of Financial Inclusion

Journal of Contemporary Accounting & Economics, 13(3): 263-281

50 Pages Posted: 14 Aug 2017 Last revised: 4 Jan 2021

See all articles by Sudipta Bose

Sudipta Bose

Discipline of Accounting and Finance, Newcastle Business School, The University of Newcastle, Sydney, Australia

Amitav Saha

School of Business, The University of Notre Dame Australia

Habib Khan

University of Canberra

Shajul Islam

Stamford University Bangladesh

Date Written: August 11, 2017

Abstract

We examine the association between financial inclusion disclosure and firm performance in Bangladeshi banks from 2009 to 2014 in response to a regulatory directive on the engagement of banking firms in financial inclusion activities. We find a positive association between financial inclusion disclosure and banking firms’ subsequent performance, with this relationship moderated by market competition and government ownership. We also find evidence that firms’ engagement in financial inclusion activities increases their market share, with the disclosure of this information reducing the information asymmetry between managers and capital market participants. The broad implication of our research findings is that firms considering investing in financial inclusion activities could benefit from improved firm performance and gain market share. The research findings contribute to the larger debate on the reasons why firms should consider incorporating these initiatives into their operational activities. In addition, the findings inform various international organisations that promote financial inclusion activities.

Keywords: Financial inclusion disclosure, Banking industry, Firm performance, Emerging economy, Stakeholder theory

JEL Classification: G21, M14, M41, M48

Suggested Citation

Bose, Sudipta and Saha, Amitav and Khan, Habib and Islam, Shajul, Non-Financial Disclosure and Market-Based Firm Performance: The Initiation of Financial Inclusion (August 11, 2017). Journal of Contemporary Accounting & Economics, 13(3): 263-281, Available at SSRN: https://ssrn.com/abstract=3017175

Sudipta Bose (Contact Author)

Discipline of Accounting and Finance, Newcastle Business School, The University of Newcastle, Sydney, Australia ( email )

Sydney
Australia

HOME PAGE: http://www.newcastle.edu.au/profile/sudipta-bose

Amitav Saha

School of Business, The University of Notre Dame Australia ( email )

Sydney
Sydney, NSW 2000
Australia

Habib Khan

University of Canberra ( email )

Canberra, Australian Capital Territory 2601
Australia

Shajul Islam

Stamford University Bangladesh ( email )

744, Satmosjid Road
Dhaka, 1209
Bangladesh

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