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Relationship between Corporate Information Disclosure and Financial Performance in Saudi Arabia

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  • Mohammad Hariri

Abstract

This study explains the influence of the corporate disclosure of firms listed on the Kingdom of Saudi Arabia’s stock exchange (Tadawul) on their subsequent financial performance. The research was conducted using an empirical-analytical approach at an explanatory level. Hypotheses were formulated based on secondary data and a general linear model that explains the financial performance measures based on the relevant corporate information disclosed by companies listed on Tadawul was used. Firms that disclosed the use of their strengths and resources to achieve objectives related to financial, economic, and environmental issues had a negative impact on the excess return expected beyond the systematic risk-adjusted return. Jensen’s alpha index was found to be the most appropriate financial performance measure to evaluate the relationship between corporate disclosure practices and firms’ subsequent performance. This study contributes to a better understanding of how the International Integrated Reporting Framework fosters value creation in financial capital. To the best of the author’s knowledge, this is the first study to use statistical procedures to explain the simultaneous effects of multiple explanatory variables on multiple explained variables, which constitutes a major methodological contribution.

Suggested Citation

  • Mohammad Hariri, 2022. "Relationship between Corporate Information Disclosure and Financial Performance in Saudi Arabia," International Business Research, Canadian Center of Science and Education, vol. 15(3), pages 1-18, March.
    • Handle: RePEc:ibn:ibrjnl:v:15:y:2022:i:3:p:18
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    References listed on IDEAS

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    1. Cristiano Busco & Mark L. Frigo & Paolo Quattrone & Angelo Riccaboni, 2013. "Towards Integrated Reporting: Concepts, Elements and Principles," Springer Books, in: Cristiano Busco & Mark L. Frigo & Angelo Riccaboni & Paolo Quattrone (ed.), Integrated Reporting, edition 127, chapter 1, pages 3-18, Springer.
    2. Francisco Climent & Paula Mollá & Pilar Soriano, 2020. "The Investment Performance of U.S. Islamic Mutual Funds," Sustainability, MDPI, vol. 12(9), pages 1-18, April.
    3. John Dumay & Cristiana Bernardi & James Guthrie & Paola Demartini, 2016. "Integrated reporting: A structured literature review," Accounting Forum, Taylor & Francis Journals, vol. 40(3), pages 166-185, September.
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    Cited by:

    1. Wang, Shanshan & Wan, Yi, 2024. "Network news reporting, information transparency, and corporate technological innovation," Finance Research Letters, Elsevier, vol. 65(C).
    2. Liu, Kai & Duan, Ditao & Wang, Ruoyan, 2024. "Executive educational background and corporate strategic information disclosure," International Review of Economics & Finance, Elsevier, vol. 96(PA).

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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