What Do Firms Disclose and Why? Enforcing Corporate Governance and Transparency in Central and Eastern Europe

33 Pages Posted: 6 Mar 2005

See all articles by Erik Berglöf

Erik Berglöf

Institute of Global Affairs, London School of Economics and Political Science

Anete Pajuste

Stockholm School of Economics, Riga; European Gorporate Governance Institute (ECGI)

Multiple version iconThere are 2 versions of this paper

Date Written: May 10, 2005

Abstract

While specific corporate governance rules often are controversial, most observers agree on the need to disclose who owns and controls a firm and what governance arrangements are in place. This paper examines such disclosure in a sample of 370 companies listed on stock exchanges in Central and Eastern Europe. The data show widespread non-disclosure of even the most basic elements of corporate governance arrangements, despite existing regulation. The level of disclosure varies substantially across firms, and there is a strong country effect in what companies disclose. Overall, what is disclosed depends on the legal framework and practice in a given country, but it does not correlate with firms' financial performance. On the other hand, financial performance is strongly related with how easily available the information is to the public. In particular, information is more available in larger firms, firms with lower leverage, higher market-to-book ratios, and more concentrated ownership.

Keywords: Corporate governance, ownership concentration, transition economics, disclosure, enforcement

JEL Classification: G15, G18

Suggested Citation

Berglöf, Erik and Pajuste, Anete, What Do Firms Disclose and Why? Enforcing Corporate Governance and Transparency in Central and Eastern Europe (May 10, 2005). Available at SSRN: https://ssrn.com/abstract=676689 or http://dx.doi.org/10.2139/ssrn.676689

Erik Berglöf

Institute of Global Affairs, London School of Economics and Political Science ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Anete Pajuste (Contact Author)

Stockholm School of Economics, Riga ( email )

Strelnieku iela 4a
Riga, LV 1010
Latvia

European Gorporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

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