Harmonization Of Voluntary Disclosure Practices By Japanese Companies

The costs and benefits of harmonization of international accounting and disclosure practices by firms is an important policy issue. This paper investigates the extent to which voluntary disclosure practices by Japanese firms have converged since the collapse of Japan’s financial ‘bubble’ of the late 1980’s. Convergence of voluntary disclosure would suggest that Japanese firms respond to environmental and market pressures by adopting increasingly similar reporting practices. Our findings suggest that, for our sample of Japanese firms, there was neither more, nor less, convergence in selected voluntary disclosure practices over the sample period, although the average level of disclosure did increase. The results suggest that Japanese firms were in “equilibrium” in terms of the scope of information they voluntarily disclosed, although they perceived net benefits in increasing the quantity of disclosed information.