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Voluntary disclosure and stock market liquidity: evidence from the Jordanian capital market


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  • Ayman E. Haddad
  • Wasim K. AlShattarat
  • Haitham Nobanee


The objectives of this study are to measure the level of voluntary disclosure provided in the annual reports of Jordanian companies and to examine the impact of disclosure level on the stock market liquidity using Jordanian data. To achieve the first objective, a self-constructed disclosure index consisting of 62 items was applied to the annual reports of 60 Jordanian non-financial companies listed at the Amman Stock Exchange for the year 2004. It was found that there is a considerable variation in the extent of voluntary disclosure among the companies. On average, a company disclosed 28% of the items of information included in the disclosure index. To achieve the second objective of this study, the relative bid-ask spread was used as a proxy for stock market liquidity. The results of regressing the bid-ask spread on disclosure level, after controlling for other variables, show that the higher voluntarily disclosed information provided in the Jordanian annual reports reduces the spread between the bids and asks, and thereby increases the stock market liquidity.

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Bibliographic Info

Article provided by Inderscience Enterprises Ltd in its journal Int. J. of Accounting, Auditing and Performance Evaluation.

Volume (Year): 5 (2009)
Issue (Month): 3 ()
Pages: 285-309

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Handle: RePEc:ids:ijaape:v:5:y:2009:i:3:p:285-309

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Keywords: Arab financial markets; financial reporting; stock market liquidity; voluntary disclosure; Jordan; capital markets; annual reports.;


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Cited by:
  1. Nadia Loukil & Ouidad Yousfi, 2011. "Firm's Information Environment and Stock Liquidity : Evidence from Tunisian Context," Post-Print, HAL hal-00813921, HAL.
  2. Loukil, Nadia & Yousfi, Ouidad, 2010. "Does corporate governance affect stock liquidity in the Tunisian Stock Market?," MPRA Paper 28697, University Library of Munich, Germany, revised Feb 2011.
  3. Fawzi Al Sawalqa, 2014. "Corporate Governance Mechanisms and Voluntary Disclosure Compliance. The Case of Banks in Jordan," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(2), pages 369-384, April.


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