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Financial distress and corporate transparency/opacity: The role of firm visibility

Author

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  • Kuzey, Cemil
  • Uyar, Ali
  • Wasiuzzaman, Shaista
  • Karaman, Abdullah S.
  • Inwinkl, Petra

Abstract

This study investigated whether financially distressed firms become more transparent or more opaque and whether firm visibility plays a significant role in firms’ engagement with sustainability reporting practices. We drew on a global sample of records from between 2005 and 2019 (including 10 sectors). The findings showed that financially distressed firms avoid publishing sustainability reports, obtaining independent assurance for these reports, and crafting the reports according to the GRI framework. Furthermore, we found that financially distressed firms with higher visibility are more likely to issue sustainability reports, follow GRI guidelines in crafting these reports, and have the reports assured by an external verifier.

Suggested Citation

  • Kuzey, Cemil & Uyar, Ali & Wasiuzzaman, Shaista & Karaman, Abdullah S. & Inwinkl, Petra, 2023. "Financial distress and corporate transparency/opacity: The role of firm visibility," International Review of Economics & Finance, Elsevier, vol. 88(C), pages 766-798.
    • Handle: RePEc:eee:reveco:v:88:y:2023:i:c:p:766-798
    DOI: 10.1016/j.iref.2023.07.019
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    References listed on IDEAS

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    Cited by:

    1. Ruiying Liu & Yuchi Li & Zhanli Li, 2025. "What influenced the lack of diversity in CSR after the company's losses: evidence from topic modeling," Papers 2509.23424, arXiv.org.
    2. Uyar, Ali & Gerged, Ali Meftah & Kuzey, Cemil & Hamrouni, Amal & Karaman, Abdullah S., 2024. "CSR awarding: A test of social reputation and impression management," International Review of Economics & Finance, Elsevier, vol. 96(PC).

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