IDEAS home Printed from https://ideas.repec.org/p/ebg/heccah/0904.html
   My bibliography  Save this paper

Why do you speak English (in your annual report)?

Author

Listed:
  • Jeanjean, Thomas
  • Stolowy, Hervé
  • Lesage, Cédric

Abstract

In this study the authors analyze the factors associated with the publication of an English-language annual report in non-English-speaking countries. Using a sample of 3,994 firms from 27 countries in 2003, they find that about 50% of the sample firms issue annual reports in English. Our findings suggest that the decision to publish an English annual report is related to the internationalization process (via foreign sales), language barriers (via language distance and language importance), governance (via ownership structure) and financial concerns (via the need for external financing, capital market size and cross-listing).

Suggested Citation

  • Jeanjean, Thomas & Stolowy, Hervé & Lesage, Cédric, 2008. "Why do you speak English (in your annual report)?," HEC Research Papers Series 904, HEC Paris.
    • Handle: RePEc:ebg:heccah:0904
    as

    Download full text from publisher

    File URL: http://www.hec.fr/var/fre/storage/original/application/12d0038a12b2519189dbcef91e321634.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lucia S Chang & Kenneth S Most & Carlos W Brain, 1983. "The Utility of Annual Reports: An International Study," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 14(1), pages 63-84, March.
    2. Ruud Vergoossen, 1993. "The use and perceived importance of annual reports by investment analysts in the Netherlands," European Accounting Review, Taylor & Francis Journals, vol. 2(2), pages 219-244.
    3. Fama, Eugene F & French, Kenneth R, 1992. "The Cross-Section of Expected Stock Returns," Journal of Finance, American Finance Association, vol. 47(2), pages 427-465, June.
    4. Myers, Stewart C. & Majluf, Nicholas S., 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Journal of Financial Economics, Elsevier, vol. 13(2), pages 187-221, June.
    5. Barber, Brad M & Lyon, John D, 1997. "Firm Size, Book-to-Market Ratio, and Security Returns: A Holdout Sample of Financial Firms," Journal of Finance, American Finance Association, vol. 52(2), pages 875-883, June.
    6. Stewart C. Myers & Nicholas S. Majluf, 1984. "Corporate Financing and Investment Decisions When Firms Have InformationThat Investors Do Not Have," NBER Working Papers 1396, National Bureau of Economic Research, Inc.
    7. Campbell, David & Cornelia Beck, A. & Shrives, Philip, 2005. "A note on comparative language interrogation for content analysis: The example of English vs. German," The British Accounting Review, Elsevier, vol. 37(3), pages 339-350.
    8. Jonathan L Calof, 1994. "The Relationship Between Firm Size and Export Behavior Revisited," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 25(2), pages 367-387, June.
    9. Frédéric Sonney, 2009. "Financial Analysts' Performance: Sector Versus Country Specialization," Review of Financial Studies, Society for Financial Studies, vol. 22(5), pages 2087-2131, May.
    10. Graham, John R. & Harvey, Campbell R. & Rajgopal, Shiva, 2005. "The economic implications of corporate financial reporting," Journal of Accounting and Economics, Elsevier, vol. 40(1-3), pages 3-73, December.
    11. Ray Ball, 2006. "International Financial Reporting Standards (IFRS): pros and cons for investors," Accounting and Business Research, Taylor & Francis Journals, vol. 36(S1), pages 5-27.
    12. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Law and Finance," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1113-1155, December.
    13. Yadong Luo & Oded Shenkar, 2006. "The multinational corporation as a multilingual community: Language and organization in a global context," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 37(3), pages 321-339, May.
    14. Andrea Bonaccorsi, 1992. "On the Relationship Between Firm Size and Export Intensity," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 23(4), pages 605-635, December.
    15. Daniel Sullivan, 1994. "Measuring the Degree of Internationalization of a Firm," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 25(2), pages 325-342, June.
    16. Bernard Raffournier, 1995. "The determinants of voluntary financial disclosure by Swiss listed companies," European Accounting Review, Taylor & Francis Journals, vol. 4(2), pages 261-280.
    17. Merton, Robert C, 1987. "A Simple Model of Capital Market Equilibrium with Incomplete Information," Journal of Finance, American Finance Association, vol. 42(3), pages 483-510, July.
    18. James S. Ang & Rebel A. Cole & James Wuh Lin, 2000. "Agency Costs and Ownership Structure," Journal of Finance, American Finance Association, vol. 55(1), pages 81-106, February.
    19. Briance Mascarenhas, 1986. "International Strategies of Non-Dominant Firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 17(1), pages 1-25, March.
    20. Douglas Dow & Amal Karunaratna, 2006. "Developing a multidimensional instrument to measure psychic distance stimuli," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 37(5), pages 578-602, September.
    21. Marschan, Rebecca & Welch, Denice & Welch, Lawrence, 1997. "Language: The forgotten factor in multinational management," European Management Journal, Elsevier, vol. 15(5), pages 591-598, October.
    22. Suresh Kotha & Violina P Rindova & Frank T Rothaermel, 2001. "Assets and Actions: Firm-Specific Factors in the Internationalization of U.S. Internet Firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(4), pages 769-791, December.
    23. Korczak, Piotr & Bohl, Martin T., 2005. "Empirical evidence on cross-listed stocks of Central and Eastern European companies," Emerging Markets Review, Elsevier, vol. 6(2), pages 121-137, June.
    24. Jan Johanson & Jan-Erik Vahlne, 1977. "The Internationalization Process of the Firm—A Model of Knowledge Development and Increasing Foreign Market Commitments," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 8(1), pages 23-32, March.
    25. Sanjeev Agarwal & Sridhar N Ramaswami, 1992. "Choice of Foreign Market Entry Mode: Impact of Ownership, Location and Internationalization Factors," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 23(1), pages 1-27, March.
    26. Sucheta Nadkarni & Pedro David Perez, 2007. "Prior conditions and early international commitment: the mediating role of domestic mindset," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(1), pages 160-176, January.
    27. Hirschey, M & Weygandt, Jj, 1985. "Amortization Policy For Advertising And Research And Development Expenditures," Journal of Accounting Research, Wiley Blackwell, vol. 23(1), pages 326-335.
    28. Myers, Stewart C., 1977. "Determinants of corporate borrowing," Journal of Financial Economics, Elsevier, vol. 5(2), pages 147-175, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Edith Leung & Arnt Verriest, 2015. "The Impact of IFRS 8 on Geographical Segment Information," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 42(3-4), pages 273-309, April.
    2. Drago, Carlo & Ginesti, Gianluca & Pongelli, Claudia & Sciascia, Salvatore, 2018. "Reporting strategies: What makes family firms beat around the bush? Family-related antecedents of annual report readability," Journal of Family Business Strategy, Elsevier, vol. 9(2), pages 142-150.
    3. Stolowy, Hervé & Jeanjean, Thomas & Erkens, Michael, 2011. "The economic consequences of increasing the international visibility of financial reports," HEC Research Papers Series 957, HEC Paris.
    4. Laaksonen, Jenni, 2022. "Translation, hegemony and accounting: A critical research framework with an illustration from the IFRS context," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 89(C).
    5. Thomas Jeanjean & Hervé Stolowy & Michael Erkens, 2012. "Economic consequences of adopting English for annual reports," Post-Print hal-00690931, HAL.
    6. Chen, Jason V. & Li, Feng, 2015. "Discussion of “Textual analysis and international financial reporting: Large sample evidence”," Journal of Accounting and Economics, Elsevier, vol. 60(2), pages 181-186.
    7. Peter Iliev & Darius P. Miller & Lukas Roth, 2014. "Uninvited U.S. Investors? Economic Consequences of Involuntary Cross‐Listings," Journal of Accounting Research, Wiley Blackwell, vol. 52(2), pages 473-519, May.
    8. Lang, Mark & Stice-Lawrence, Lorien, 2015. "Textual analysis and international financial reporting: Large sample evidence," Journal of Accounting and Economics, Elsevier, vol. 60(2), pages 110-135.
    9. Nobes, Christopher, 2018. "Lessons from misclassification in international accounting," The British Accounting Review, Elsevier, vol. 50(3), pages 239-254.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thomas Jeanjean & Hervé Stolowy & Michael Erkens, 2010. "Really “Lost in translation”? The economic consequences of issuing an annual report in English," Post-Print hal-00479511, HAL.
    2. Stolowy, Hervé & Jeanjean, Thomas & Erkens, Michael, 2011. "The economic consequences of increasing the international visibility of financial reports," HEC Research Papers Series 957, HEC Paris.
    3. Thomas Jeanjean & Hervé Stolowy & Michael Erkens, 2012. "Economic consequences of adopting English for annual reports," Post-Print hal-00690931, HAL.
    4. Oxelheim, Lars, 2019. "Optimal vs satisfactory transparency: The impact of global macroeconomic fluctuations on corporate competitiveness," International Business Review, Elsevier, vol. 28(1), pages 190-206.
    5. Linnenluecke, Martina K. & Chen, Xiaoyan & Ling, Xin & Smith, Tom & Zhu, Yushu, 2017. "Research in finance: A review of influential publications and a research agenda," Pacific-Basin Finance Journal, Elsevier, vol. 43(C), pages 188-199.
    6. Andy Lardon & Marc Deloof, 2014. "Financial disclosure by SMEs listed on a semi-regulated market: evidence from the Euronext Free Market," Small Business Economics, Springer, vol. 42(2), pages 361-385, February.
    7. Lindner, Thomas & Muellner, Jakob & Puck, Jonas, 2016. "Cost of Capital in an International Context: Institutional Distance, Quality, and Dynamics," Journal of International Management, Elsevier, vol. 22(3), pages 234-248.
    8. Kisser, Michael & Rapushi, Loreta, 2022. "Equity issues, creditor control and market timing patterns: Evidence from leverage decreasing recapitalizations," Journal of Empirical Finance, Elsevier, vol. 67(C), pages 196-216.
    9. Harvey, Campbell R. & Lins, Karl V. & Roper, Andrew H., 2004. "The effect of capital structure when expected agency costs are extreme," Journal of Financial Economics, Elsevier, vol. 74(1), pages 3-30, October.
    10. Malcolm Baker & Richard S. Ruback & Jeffrey Wurgler, 2004. "Behavioral Corporate Finance: A Survey," NBER Working Papers 10863, National Bureau of Economic Research, Inc.
    11. Chiung-Jung Chen & Chwo-Ming Joseph Yu, 2011. "FDI, Export, and Capital Structure," Management International Review, Springer, vol. 51(3), pages 295-320, June.
    12. Alvarez, Roberto & Jara, Mauricio & Pombo, Carlos, 2018. "Do institutional blockholders influence corporate investment? Evidence from emerging markets," Journal of Corporate Finance, Elsevier, vol. 53(C), pages 38-64.
    13. Jan Diebecker & Friedrich Sommer, 2017. "The impact of corporate sustainability performance on information asymmetry: the role of institutional differences," Review of Managerial Science, Springer, vol. 11(2), pages 471-517, March.
    14. Kuang Kuang Deng & Siu Kei Wong & Kwong Wing Chau, 2018. "Institutions and Capital Structure: The Case of Chinese Property Firms," The Journal of Real Estate Finance and Economics, Springer, vol. 56(3), pages 352-385, April.
    15. Clive Gaunt & Steven Cahan, 2014. "Accounting and Finance: authorship and citation trends," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 54(2), pages 441-465, June.
    16. Li, Wanli & Lai, Yin & Wang, Chaohui & Tan, Bowen, 2022. "How do emerging debt market participants recognize firm internationalization?Evidence from effects on credit ratings," Emerging Markets Review, Elsevier, vol. 53(C).
    17. Lucey, Brian M. & Zhang, QiYu, 2011. "Financial integration and emerging markets capital structure," Journal of Banking & Finance, Elsevier, vol. 35(5), pages 1228-1238, May.
    18. Guedhami, Omrane & Pittman, Jeffrey, 2008. "The importance of IRS monitoring to debt pricing in private firms," Journal of Financial Economics, Elsevier, vol. 90(1), pages 38-58, October.
    19. Roychowdhury, Sugata & Shroff, Nemit & Verdi, Rodrigo S., 2019. "The effects of financial reporting and disclosure on corporate investment: A review," Journal of Accounting and Economics, Elsevier, vol. 68(2).
    20. Heider, Florian & Gropp, Reint E., 2008. "The Determinants of Capital Structure: Some Evidence from Banks," ZEW Discussion Papers 08-015, ZEW - Leibniz Centre for European Economic Research.

    More about this item

    Keywords

    International financial reporting; annual report; language; cost-benefit analysis; logistic regression;
    All these keywords.

    JEL classification:

    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebg:heccah:0904. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Antoine Haldemann (email available below). General contact details of provider: https://edirc.repec.org/data/hecpafr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.