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Non-financial disclosure and market-based firm performance: The initiation of financial inclusion

Author

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  • Bose, Sudipta
  • Saha, Amitav
  • Khan, Habib Zaman
  • Islam, Shajul

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.

Suggested Citation

  • Bose, Sudipta & Saha, Amitav & Khan, Habib Zaman & Islam, Shajul, 2017. "Non-financial disclosure and market-based firm performance: The initiation of financial inclusion," Journal of Contemporary Accounting and Economics, Elsevier, vol. 13(3), pages 263-281.
    • Handle: RePEc:eee:jocaae:v:13:y:2017:i:3:p:263-281
    DOI: 10.1016/j.jcae.2017.09.006
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    Cited by:

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    2. Lee, Cheng-Hsun & Bose, Sudipta, 2021. "Do family firms engage in less tax avoidance than non-family firms? The corporate opacity perspective," Journal of Contemporary Accounting and Economics, Elsevier, vol. 17(2).
    3. Mashiur Rahman & Siti Zaleha Abdul Rasid, 2021. "Does Managers Opportunistic Motive Moderate the Relationship Between CSR Disclosure and Firms Market Value of Equity? Study on the Listed Banking Companies in the Dhaka Stock Exchange," Journal of Asian Business Strategy, Asian Economic and Social Society, vol. 11(1), pages 33-45, June.
    4. Eissa A. Al-Homaidi & Mosab I. Tabash & Anwar Ahmad & David McMillan, 2020. "The profitability of islamic banks and voluntary disclosure: empirical insights from Yemen," Cogent Economics & Finance, Taylor & Francis Journals, vol. 8(1), pages 1778406-177, January.
    5. Habib Zaman Khan & Sudipta Bose & Benedict Sheehy & Ali Quazi, 2021. "Green banking disclosure, firm value and the moderating role of a contextual factor: Evidence from a distinctive regulatory setting," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 3651-3670, December.
    6. Salaheldin Hamad & Fong‐Woon Lai & Muhammad Kashif Shad & Zdeňka Konečná & Feybi Ariani Goni & Abdoulmohammad Gholamzadeh Chofreh & Jiří Jaromír Klemeš, 2022. "Corporate governance code and voluntary disclosure of integrated reporting: Evidence from an emerging economy," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(6), pages 1497-1510, December.
    7. Taslima Akther & Mushfiqur Rahman & Md. Mufidur Rahman, 2023. "Factors influencing commercial bank profitability in Bangladesh: a panel data approach," Future Business Journal, Springer, vol. 9(1), pages 1-20, December.
    8. Betgilu Oshora & Goshu Desalegn & Eva Gorgenyi-Hegyes & Maria Fekete-Farkas & Zoltan Zeman, 2021. "Determinants of Financial Inclusion in Small and Medium Enterprises: Evidence from Ethiopia," JRFM, MDPI, vol. 14(7), pages 1-19, June.
    9. Salaheldin Hamad & Muhammad Umar Draz & Fong-Woon Lai, 2020. "The Impact of Corporate Governance and Sustainability Reporting on Integrated Reporting: A Conceptual Framework," SAGE Open, , vol. 10(2), pages 21582440209, June.
    10. Su-In Kim & Hyejeong Shin & Heejeong Shin & Sorah Park, 2019. "Organizational Slack, Corporate Social Responsibility, Sustainability, and Integrated Reporting: Evidence from Korea," Sustainability, MDPI, vol. 11(16), pages 1-17, August.
    11. Eissa A. Al-Homaidi & Mosab I. Tabash & Najib H. S. Farhan & Faozi A. Almaqtari, 2018. "Bank-specific and macro-economic determinants of profitability of Indian commercial banks: A panel data approach," Cogent Economics & Finance, Taylor & Francis Journals, vol. 6(1), pages 1548072-154, January.
    12. Ruth Zárate-Rueda & Juan Sebastian Bautista-Zárate & Yolima Ivonne Beltrán-Villamizar, 2021. "Stakeholders within the framework of Corporate Social Responsibility: A systematic review," Estudios Gerenciales, Universidad Icesi, vol. 37(160), pages 460-471, August.

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    More about this item

    Keywords

    Financial inclusion disclosure; Banking industry; Firm performance; Emerging economy; Stakeholder theory;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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