Disclosure on corporate governance in the European Union
AbstractDisclosure on Corporate Governance in the European Union Heidi Vander Bauwhede and Marleen Willekens* ABSTRACT Manuscript Type: Empirical Research Question/Issue: In this paper, we examine the determinants of the level of disclosure on corporate governance practices among European listed companies in the time period preceding the adoption of the European Union recommendations and Action Plan. Research Findings/Results: Using ratings on corporate governance disclosure issued by an independent rating agency we find that – ceteris paribus – the level of disclosure: (1) is lower for companies with higher ownership concentration; (2) is higher for companies from common-law countries; and (3) increases with the level of working capital accruals. Theoretical Implications: The results of the study support theoretical arguments that companies disclose corporate governance information in order to reduce information asymmetry and agency costs stemming from the separation between ownership and control, and to improve investor confidence in the reported accounting information. The study suggests various avenues for future research on corporate governance. Practical Implications: To policy makers and practitioners, the results suggest that a mandatory corporate governance disclosure requirement is abundant, and perhaps could even be inefficient. The results also indicate which types of companies can be expected to be least willing to comply with recent corporate governance disclosure requirements, and thus will need extra monitoring
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Bibliographic InfoPaper provided by Katholieke Universiteit Leuven in its series Open Access publications from Katholieke Universiteit Leuven with number urn:hdl:123456789/198151.
Date of creation: Mar 2008
Date of revision:
Publication status: Published in Corporate governance (2008-03) v.16, p.101-115
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Web page: http://www.kuleuven.be
corporate governane; Disclosure; Governance; European Union; International; Social Sciences; Science;
Other versions of this item:
- Heidi Vander Bauwhede & Marleen Willekens, 2008. "Disclosure on Corporate Governance in the European Union," Corporate Governance: An International Review, Wiley Blackwell, vol. 16(2), pages 101-115, 03.
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