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The Reputational Consequences Of Disclosures


  • Marco Trombetta

    () (Universidad Carlos III de Madrid)

  • Mónica Espinosa

    (Universidad de Alicante)


In our study we focus on the determinants of reputation and, in particular, on the relation between the quality of annual report disclosures of companies and their reputation. We try to bring together two strands of literature: the literature on corporate reputation and the literature on corporate disclosures. Using data on corporate reputation and on quality of annual report disclosures for a sample of Spanish companies, we test the hypothesis that annual report disclosure quality is a crucial determinant of corporate reputation. After controlling for other possible determinants, especially size, we find significant evidence in favour of our hypothesis. Firms with a better annual report disclosure score are more likely to be rated among the top 50 national companies in terms of corporate reputation. Moreover the disclosure score positively affects the reputation score. Nuestro trabajo se centra en los determinantes de la reputación y, en particular,en la relación entre la calidad de la revelación de los informes anuales de las empresas ysu reputación. Tratamos de entrelazar dos grandes ramas de la literatura: la literaturarelativa a la reputación corporativa y la relacionada con revelación en los informesanuales. Utilizando datos de reputación empresarial y de calidad de los informes anualespara una muestra de empresas españolas, contrastamos la hipótesis de que la calidad dela revelación del informe anual es un determinante significativo de la reputaciónempresarial. Después de controlar el efecto de otros posibles determinantes,especialmente el tamaño, encontramos evidencia significativa a favor de nuestrahipótesis. Las empresas con mayor calidad de información en sus informes anualestienen más posibilidades de figurar entre las 50 mejores empresas españolas en términosde reputación.

Suggested Citation

  • Marco Trombetta & Mónica Espinosa, 2004. "The Reputational Consequences Of Disclosures," Working Papers. Serie EC 2004-10, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  • Handle: RePEc:ivi:wpasec:2004-10

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    References listed on IDEAS

    1. Beatty, Randolph P. & Ritter, Jay R., 1986. "Investment banking, reputation, and the underpricing of initial public offerings," Journal of Financial Economics, Elsevier, vol. 15(1-2), pages 213-232.
    2. Begoña Giner Inchausti, 1997. "The influence of company characteristics and accounting regulation on information disclosed by Spanish firms," European Accounting Review, Taylor & Francis Journals, vol. 6(1), pages 45-68, May.
    3. Chalmers, Keryn & Godfrey, Jayne M., 2004. "Reputation costs: the impetus for voluntary derivative financial instrument reporting," Accounting, Organizations and Society, Elsevier, vol. 29(2), pages 95-125, February.
    4. Russell Lundholm, 2002. "Bringing the Future Forward: The Effect of Disclosure on the Returns-Earnings Relation," Journal of Accounting Research, Wiley Blackwell, vol. 40(3), pages 809-839, June.
    5. Chauvin, Keith W. & Hirschey, Mark, 1994. "Goodwill, profitability, and the market value of the firm," Journal of Accounting and Public Policy, Elsevier, vol. 13(2), pages 159-180.
    6. Leuz, C & Verrecchia, RE, 2000. "The economic consequences of increased disclosure," Journal of Accounting Research, Wiley Blackwell, vol. 38, pages 91-124.
    7. 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.
    8. Arthur Fishman & Rafael Rob, 2002. "Is Bigger Better? Investing in Reputation," Penn CARESS Working Papers 40893328535d25cf3e69a981a, Penn Economics Department.
    9. repec:bla:joares:v:31:y:1993:i:2:p:246-271 is not listed on IDEAS
    10. Christine A. Botosan, 2002. "A Re-examination of Disclosure Level and the Expected Cost of Equity Capital," Journal of Accounting Research, Wiley Blackwell, vol. 40(1), pages 21-40, March.
    11. Klein, Benjamin & Leffler, Keith B, 1981. "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 615-641, August.
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    Cited by:

    1. Dima, Bogdan & Dima(Cristea), Stefana Maria & Moldovan, Nicoleta & Pirtea, Marilen Gabriel, 2010. "National legislative systems and foreign standards and regulations: The case of International Financial Reporting Standards adoption," MPRA Paper 27172, University Library of Munich, Germany.

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    reputación empresarial; calidad de la revelación; informe anual. corporate reputation; disclosure quality; annual report; financial performance;

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