Corporate Governance,Voluntary Disclosure And Firm Value

Corporate governance is a vital issue that is being addressed widely by regulators,and capital market participants around the world.Voluntary disclosure identified as one of the challenges facing the implementation of corporate governance especially in developing and emerging economies.Therefore,this study aims to contribute to corporate governance and voluntary disclosure literature by providing empirical evidence of the relationship between ownership structure,board of director characteristics,audit committee characteristics,and voluntary corporate disclosure.Also;the relationship between voluntary corporate disclosure and firm value based on market measures in an emerging capital market,based on a comprehensive theoretical framework and explore the economic consequences of corporate governance and its main characteristics.This study provides two kinds of literature,voluntary disclosure literature,and corporate governance literature,and supports the latest empirical evidence for the correlation between voluntary disclosure practices and corporate governance characteristics in one of the countries of the Middle East and North Africa(MENA),Egypt,compared with developed countries and Asian emerging markets.At the time of this study,in the case of Egypt,there was no prior empirical research,involving the voluntary corporate disclosure and its relationship with firm value.Therefore,the current study provides new evidence for a country that considered as a representative of Arab and African countries.Voluntary corporate disclosure is analyzed based on broader groups of items rather than narrow groups.It examines overall voluntary corporate disclosure and the different categories of voluntary corporate disclosure.These categories are Strategy and Performance Disclosure,Financial Disclosure,Shares Information,Accounting Policy Review,Key Non-Financial Disclosure,Human Resources,Community Involvement/participation,Environmental Issues,and Corporate Governance Information to provide a full explanation of trends of the voluntary disclosure categories.This study empirically analyzes voluntary corporate disclosure in Egypt.In particular,this study seeks to:(i)evaluate voluntary corporate disclosure practices of Egyptian listed firms over the period 2010-2017;(ii)examine the contribution of ownership structure,board of director characteristics,audit committee characteristics and firm characteristics in explaining variation in the extent of voluntary corporate disclosure;and(iii)assess the relationship between voluntary corporate disclosure and firm value.Through the quantitative approach,the study tested balanced panel data of 210 Egyptian listed firms from 2010 to 2017 to generate a total of 1680 firm-year observations that were collected manually from the sampled firms' annual reports.First,the constructed Egyptian voluntary corporate disclosure index(VCD-Index)helped improve voluntary corporate disclosure among Egyptian listed firms.Second,this study found that institutional ownership,board size,duality in position,board frequency meeting,audit committee size,audit committee frequency meeting,firm size,and firm profitability have a significant and positive influence on the level of voluntary corporate disclosure.In contrast,the analysis showed that director ownership,block-holder ownership,independent directors,audit committee independence,audit committee expertise and firm leverage are correlated negatively with the level of voluntary corporate disclosure.On the other hand,this study found that the auditor type has a positive and insignificant correlation with the level of voluntary corporate disclosure.The results from the quantitative analysis are robust to controlling for some potential endogeneity problems.Third,the findings obtained from firm value model suggest that good corporate governance practices are positively related to Tobin's Q(Q-ratio).Whereas the level of voluntary corporate disclosure,firm profitability and audit type are positively correlated to Tobin's Q,where firm size and firm leverage are negatively associated with Tobin's Q.Finally,these findings obtained from both models suggest that the regulatory authorities need to strengthen further efforts to enhance the level of awareness of good voluntary corporate disclosure practices among critical internal and external stakeholders of corporate governance in Egypt for increasing the firm value.