The Determinants of Voluntary Disclosure in Emerging Markets: The Case of Egypt

Abstract

This paper estimates the extent of voluntary disclosure and the impact of a comprehensive set of corporate governance attributes (firm size, firm age, firm profitability, firm leverage, board independent, the existence of audit committee, director ownership, block-holder ownership, Auditor Specialization and Auditor Type) on the extent of voluntary disclosure in Egypt. It is based on the measurement of disclosure to the published data generated from a checklist of 54 items to measure the levels of voluntary disclosure, which had been collected from reviewing manually the financial statements and electronic sites a sample of Egyptian companies listed on the Egyptian Stock Exchange (EGX). We also have level standard ordinary least square (OLS) regression analysis to test for our sample of 100 observations to companies listed on the Egyptian Stock Exchange in 2016. We find that the average level of voluntary disclosure is 18.38%. Our analysis also shows that the size of the firm, firm age, profitability of the firm, auditor specialisation, and ownership of director have a positive impact on voluntary disclosure. However, we find a negative relationship between firm leverage and voluntary disclosure. Our analysis also shows that board independence, audit committee, Block-holder ownership and Auditor Type have no impact on voluntary disclosure. The empirical evidence from this study improves the understanding of the voluntary corporate disclosure environment in Egypt as one of the emerging markets in the Middle East.

Keywords: Corporate Governance, Firm characteristics, Voluntary Disclosure.