TITLE:
The Extent of the Effect of Voluntary Disclosure on the Firm Performance
AUTHORS:
Mohamed Gaber Ibrahim Ismail, Ahmed Sakr
KEYWORDS:
Voluntary Disclosure, Firm Performance Indicators, Corporate Governance, Short-Term Leverage, Long-Term Leverage, Egypt
JOURNAL NAME:
Open Journal of Social Sciences,
Vol.10 No.6,
June
23,
2022
ABSTRACT: Progressively, there is a growing public awareness of corporate
activities throughout developing and less developed nations in respect of
voluntary disclosure and firm performance. As a corollary, investigations on
voluntary disclosure and firm performance which include features of corporate
governance as well as shareholder and stakeholder views provide insights for
authorities, particularly in developing nations engaging in the worldwide
industries. Thereby, this paper investigates the determinants and effects of
voluntary disclosures in Egypt during the
period of 2014 till 2020. We chose this significant time period because 2014
was one of EGX’s most years of success, since it required all listed Egyptian
firms to implement and adopt the mechanisms of corporate governance. It also
suggests that voluntary disclosure can generally boost the firm performance, in which,
this provides an incentive for the company to increase openness through
voluntary disclosure. Thereon, three key categories are employed as proxies for sustainability
and transparency: social, environmental, and intellectual capital. The investigation
of this paper thusly is concentrated on the impact of these disclosures on the
overall firm performance. Accordingly, the average voluntary disclosure index
is used to assess voluntary disclosure, which is regarded as an independent
variable. Also, the analysis includes the following control variables: Firm
Size, Leverage (S.T.D), Leverage (L.T.D), and Industry. While, the dependent
variable is firm performance, which is quantified using five dimensions: ROA, ROS, Market Cap, Earnings per share, and Tobin’s
Q. Besides, EViews-version 10 was used to collect and analyze data for
46 companies from 2014 to 2020. Therefore, the findings show that the ROA,
Market Cap, and Tobin’s Q have a significant relationship with an average
voluntary disclosure; on the other side, ROS and EPS demonstrate an
insignificant relationship with an average voluntary disclosure.