Corporate Governance Effectiveness and Voluntary ...openaccess.aast.edu/PDFs/Thesis/partial/76862_c.pdf · Corporate Governance Effectiveness and Voluntary Disclosures: An Empirical

Arab Academy For Science, Technology and Maritime Transport

Graduate School of Business

Corporate Governance Effectiveness and

Voluntary Disclosures: An Empirical Study

of the Listed Companies in Egypt

A thesis submitted to Arab Academy for Science and Technology

In partial fulfillment for the degree of Doctor of Business Administration

Submitted By

Ahmed Ibrahim El Zoheiry

Supervised By

Prof. Dr. Aiman Ahmed Ragab

Dr. Mohammed Mostafa

2014

Table of Contents

List of Tables ............................................................................. '" List of Figures .............................................................................. . Abbreviations .................................................................................. . Abstract ............ '" '" ....................................................... '" ............... . Chapter 1 Introduction ....................................................................... . 1.1 Research Problem ....................................................................... . 1.2 Research aim and objectives ........................................................... . 1.3 Research Objectives ..................................................................... . 1.4 Importance of the Research .................. '" '" ....... " ............................. , .. . 1.5 Essential Features .......................................................................... '" 1.6 S llllllIlary ...................................................................................... . Chapter 2 AN Overview of the Egyptian Economy ................................ . 2.1 Introduction ............................................................................ . 2.2 The Egyptian Stock Market ........................................................... . 2.3 The main Sectors ofthe Egyptian Economy ...................................... .

2.3.l Energy ............................... , .............................................. . 2.3.2 Agriculture .............................. '" '" ................................ '" '" 2.3.3 Tourism ............................................................................... . 2.3.4 Construction ......................................................................... . 2.3.5 Manufacturing ....................................................................... . 2.3.6 Transportation and Communication .......................................... . 2.3.7 Trade, Finance and Insurance ..................................................... . 2.3.8 Other Services ................................................................. .

2.4 The main Features of the Egyptian Market.. .................... , ................... . 2.5 Some Economic Indicators Before and After the Economic Reform Program ..... . 2.6 Achievements of the Egyptian Stock Market. ......................... '" .... " ..... . 2.7 Voluntary Disclosure ......................................................................... .

2.7.l Incentives of Voluntary Corporation Disclosure ... " . " ...................... . 2.7.1 (a) Information Asymmetry ............................... , ........... . 2.7.1 (b) Increased Analyst Coverage ...................................... . 2.7.1 (c) Stock Price Motivations ....................................... . 2.7.1 (d) Stock Compensation ........................................ . 2.7.1 (e) Management Talent.. ............................... '" ......... .

2.7.2 Constraints on Voluntary Corporate Disclosure ................................. . 2.7.2 (a) Litigation Costs ........................................................... . 2.7.2 (b) Proprietary Costs .......................................................... . 2.7.2 (c) Political Costs .............................................................. . 2.7.2 (d) Agency Costs ............................................................. . 2.7.2 (e) Disclosure Precedent .................................................... .

2.8 SllllllIlary ..................................................................................... . Chapter 3 Literature Review ................................................................. . 3.llntroduction .................................................................................. . 3.2 Market Micro-Structure Theory ......................................................... . 3.3 Liquidity Trader's Curse ................................................................. . 3.4 The Large Trader's Blessing .............................................................. . 3.5 Decline ofOTC free-riding .............................................................. . 3.6 The waiting game ........................................................................ . 3.7 Goals of Market. ........................................................................ .

- 2 -

3.7.1 Liquidity .............................................................. . 3.7.1 (a) Active bonds (turn over) ................................... . 3.7.1 (b) Bid-ask Spread ............................................... . 3.7.1 (c) Market hnpact ................................................. .

3.7.2 Volatility .................................................................. . 3.7.3 Efficiency ..................................................................... .

3.8 Transparency and Share-holder Value .......................................... . 3.8.1 How Transparencies affect the Federal Reserve and Financial market

Forcasts ............................................................................ . 3.8.2 Federal Funds Futures ....................................................... . 3.8.3 Component ofFOMC Announcements ...................................... . 3.8.4 Eurodollar Options ........................................................... . 3.8.5 Cross-Sectional Dispersion of Private Sector Forecasts .................... . 3.8.6 Deterioration in Financial Market Forecasts ................................ . 3.8.7 Explanations for the Down ward Trend ......................................... .

3.9 Financial Disclosure and Volatility in Stock Market. ............................. . 3.9.1 Literature ........................................................................ .

3.10 Summary .................................................................................... . Chapter 4 Research Methodology .................................................... . 4.1 Sample and Data ...................................................................... . 4.2 Hypothesis and Methodology ..................................................... .

4.2.1 Development of Hypotheses ...................................................... . 4.2.2 Board Characteristics ............................................................ .

4.2.2 (a) Board Composition ................................................... . 4.2.2 (b) Board Size ......................................................... .

4.2.3 Duality in Position .............................................................. . 4.3 Transparency ModeL ................................................................... . 4.4 Volatility ModeL ................................................................... . Chapter 5 Descriptive Study Results ................................................. . 5.1 Descriptive Results of Study .......................................................... . 5.2 Pearson Correlation Coefficient between Variables ................................ . 5.3 Study Model Test (Regression Model) ............................................. .

5.3.1 M ultico llnearity ................................................................. . 5.3.2 Hetroscedasticety .................................................................. . 5.3.3 Autocorrelation ........................................................................ . 5.3.4 Normality Test of the Distribution of Standardized Residual.. ............. . 5.3.5 Linear Regression Analysis ................................................... . 5.3.6 Results of Hypothesis Tests ...................................................... .

Chapter 6 Conclusion and Recommendations ................................... . 6.1 Summary and Concluding Remarks ................................................... . 6.2 Study Results ............................................................................ . 6.3 Recommendations ................................................................... . References .................................................................................. .

- 3 -

List of Tables

Chapter Five

Table (5-1) ........................................................................... . Table (5-2) .......................................................................... . Table (5-3) ........................................................................... . Table (5-4) .............................................................................. .

Chapter Six

Table (6-1) ..................................................................................... .

- 4 -

List of Figures

Chapter Three

Figure 1 ..................................................................................... .

Figure 2- Panel A ............................... " ... '" ...... '" ............. " ..... '" Figure 2- Panel B ......................................................................... . Figure 3 ..................................................................................... .

Figure 4- Panel A .................................... " .................. , ...... '" " ...... . Figure 4-Panel B ........................................................................... . Figure 5 ........................................................................................... .

Figure 6- Panel A ............. , ................. " .......... , .. , . " . " ......... '" ........... " '" Figure 6- Panel B ............................................................................... .

Chapter Five

Figure 5-1 .................... , .................................................................. '" Figure 5-2 .......................................................................................... . Figure 5-3 ......................................................................................... .

- 5 -

ADR AICPA CAO CASE CEO CG CMA ECB ECID EFSA EMH FASB FOMC GAAP GDP IMF ISAR LIFFE MB MCSD MOFT MTS OLS OTS ROE SEC UNCTAD

Abbreviations

Alternative Dispute Resolution System. American Institute of Certified Public Accountants. Central Auditing Organization. Cairo and Alexandria Stock Exchange. Chief Executive Officer. Corporate Governance. Capital Market Authority. Egyptian Central Bank. Egyptian Company of Information Dissemination. Egyptian Financial Supervisory Authority. Efficient Market Hypothesis. Financial Accounting Standards Board. Federal Open Market Committee. General Accepted Accounting Principles. Gross Domestic Product. International Monetary Fund. International Standards of Accounting and Reporting. London International Financial Futures Exchange. market-to-book. Misr Central Clearing and Depository. Minister of Foreign Trade. Mercato Telematico de Titoli di Stato. Ordinary Least Square. Over-the-Counter. Return on Equity. Securities and Exchange Commission. United Nations Conference on Trade and Development.

- 6-

Abstract

This thesis develops a model to show that an improvement in transparency, which

allows stock market investors to obtain more fum-specific information, is not always

value-enhancing for the firm. An improvement in transparency may either increase or

decrease the sensitivity of stock price to earnings, and thus, may either strengthen or

weaken managerial incentives, depending on whether the main effects is to improve

the precision of the earnings signal or to lower uncertainty.

Increased sensitivity of stock price to earnings may itself either increase or decrease

shareholder value, it increases shareholder value of low-growth fums by correcting

their under-investment, but decreases shareholder value of high-growth firms by

worsening their tendency to overinvest.

Overall, the impact of an improvement in transparency on shareholder value is

unclear and depends on a fum's risk and growth opportunities.

Faced with unstable competition, stock markets should have fairness and

transparency, the evidence from this study indicates that increasing the market

transparency makes the price discovery process more efficient than before from the

view point of stock market volatility and increases the stock market liquidity

compared with before.

- 7 -

References

Abayo, A;Adams.C.;and Roberts, C. (1993) "Measuring the Quality of Corporate Disclosure in Less Developed Countries: The Case of Tanzania" Journal of International Accounting, Auditing and Taxation 2(2): 145-158.

Abd-Elsalam. o. (1999) "The Introduction and Application of International Accounting Standards to Accounting Disclosure Regulation of a Capital Market in a Developing Country: The Case of Egypt", PhD Thesis, Herriot-Watt University, Edinburgh, UK.

Abd-Elsalam, O. and Weetman, P. (2003) "Introducing International Accounting Standards toan Emerging Capital Market: Relative Familiarity and Language Effect in Egypt."Journal of International Accounting, Auditing and Taxation 12(1): 63-84.

Abd-Elsalam, o. and Weetman, P. (2007) "Measuring Accounting Disclosure in a period of Complex Changes: the Case of Egypt", Advances in International Accounting, 20: 75104

Adams, M., & Hossain, M. (1998). Managerial discretion and voluntary disclosure: Evidence from the New Zealand life insurance industry. Journal of Accounting and Public Policy, 17,245-281.

Adhikari, A. and Tondkar, R. (1992), "Environmental Factors Influencing Accounting Disclosure Requirements of Global Stock Exchanges", Journal ofInternational Financial Management and Accounting, 4(2): 75-105.

Ahmed, M. and Scapens, R. (2000), "Cost allocation in Britain: towards an institution

alanalysis", European Accounting Review, 9: 159-204.

Akerlof G.A. (1970), 'The Market for 'Lemons': Quality Uncertainty and the Market Mechanism', Quarterly Journal of Economics, 84(3): 488-500

Alexander. D. and Archer, S. (1995) "European Accounting Guide", 2nd Edition, Harcourt Brace & Company, New York, NY.

Aljifiri, K. (2008) "Annual report disclosure in a developing country: The case of the

UAE", Advances in Accounting.

Almazan, A, J. Suarez, and S. Titman (2007).Firm's shareholders and the costs of transparency. NBER working paper.

Al-Razeen, A; and Karbhari, Y. (2004) "Interaction between compulsory and voluntary disclosure in Saudi Arabian corporate annual reports", Managerial Auditing Journal, 19 (3): 351-360

Alsaeed. K. (2006) "The Association between Firm-Specific Characteristics and Disclosure: The Case of Saudi Arabia", Managerial Auditing Journal, 21 (5): 476-496

- 113-

Anand, 1. A. (2005), "Voluntary vs Mandatory Corporate Governance: Towards an Optimal Regulatory Framework", Working paper, The Berkeley Electronic Press ,http://law.bepress.com/expresso/eps/566

Arcay, R., & Vazquez, F. (2005).Corporate characteristics, governance rules and the extent of voluntary disclosure in Spain. Advances in Accounting, 21, 299-331

Ashton, OJ. (1991), "Corporate Financial Policy: American Analytics and UK Taxation", Journal of Business Finance & Accounting, 18(4): 465-482.

Barako, (2006). 'Relationship between corporate governance attributes and voluntary disclosures in annual reports: The Kenyan experience' , Financial Reporting.

Bauwhede, H. V., & Willekens, M. (2008). Disclosure on corporate governance in the European Union. Corporate Governance: An International Review, 16(2), 101-115.

Beasley. M. (1996) "An Empirical Analysis of the Relation between the Board of Director Composition and Financial Statement Fraud", The Accounting Review, 71(4) 443-465

Beattie. V. (2005) "Moving the financial accounting research front forward: the UK contribution." The British Accounting Review 37(1): 85-114

Belkaoui, A.; and Karpik, P. (1989), "Detenninants of the Corporate Decision to Disclose Social Information", Accounting, Auditing & Accountability Journal, 2(1):

36-51.

Berardino, J. (2001) "Corporate Governance on the Agenda", South China Morning Post, Markets, p.2

Bhushan, R. and Lessard, D. (1992), "Coping with International Accounting Diversity: Fund Managers' Views on Disclosure, Reconciliation, and Harmonization",

Journal of International Financial Management and Accounting, 4(2): 149-164.

Boesso, G. (2002) "Forms of Voluntary Disclosure: Recommendations and Business Practices in Europe and U.S.", The Critical perspectives on Accounting Conference, 25-27 April, 2002, New York

Botosan, and Plumlee, A.; (2002) "A Re-examination of Disclosure Level and the Expected Cost of Equity Capital" Journal of Accounting Research, 40 (1) 21-40

Bremer, J.: and Elias, N.; (2007) "Corporate Governance in Developing Economies­the Case of Egypt", International Journal of Business Governance and Ethics, 3 (4): 430-454.

Bujaki, M., & McConomy, B. (2002). Corporate governance: Factors influencing voluntary disclosure by publicly traded Canadian firms.

- 114-

Bums, T. (2001), "Implications of infonnation technology on corporate governance",

International Journal of Low and Infonnation Technology, 9(1): 21-38.

Bushman, R. and A. 1. Smith (2003, April).Transparency, _fmancial accounting infonnation, and corporate governance.

Capital Market Authority, 2012, Current Statues of the Capital Market in Egypt, (Cairo: CMA).

Carana (2000), " The corporate Governance Policy Framework in Egypt", special Study provided to the United States Agency for International Development

Case (2002), "Egyptian Stock Exchange ", Listing and Disclosure Rules. http://www.egyptse.com/

Chau, G& Gray, S. 1. (2002).Ownership structure and corporate voluntary disclosure in Hong Kong and Singapore. The International Journal of Accounting, 37, 247-265.

Chau, G.& Leung, P. (2006). The impact of board composition and family ownership on audit committee fonnation: Evidence from Hong Kong. Journal of International Accounting, Auditing and Taxation, 15, 1-15.

Chen& Jaggi, B. (2000). Association between independent non-executive directors, family control and financial disclosures in Hong Kong. Journal of Accounting and Public Policy, 19,285-310.

Cheng, E. C. M., & Courtenay, S. M. (2004).Board composition, regulatory regime and voluntary Disclosure. Working paper. Singapore: Nanyang Business School, Nanyang Technological University.

Choi, F.: and Meek, G. (2008) "International Accounting", Sixth Edition, Pearson Education, Inc .. New Jersey

Chow, c.; and Wong-Boren, A. (1987) "Voluntary Financial Disclosure by Mexican Corporations", The Accounting Review, 62 (3): 533-541

Classens, S. (2003) "Corporate Governance and Development Review of the Literature and Outstanding Research Issues", Paper presented at the Global Governance Forum Donors Meeting, The Hague, The Netherlands, Marchl3th, 2003.

Coffee, J. (1984) "Market failure and the economic case for a mandatory disclosure system", Virginia Law Review, 70: 717-753.

Cohen, J., Gaynor, L., Krishnamoorthy, G., and Wright, A. (2007), Auditor Communications with the Audit Committee and the Board of Directors: Policy Recommendations and Opportunities for Future Research", Accounting Horizons, Vol. 21No. 2, pp. 165-87.

Collett, P.; and Hrasky, S. (2005) "Voluntary Disclosure of Corporate Governance Practicesby Listed Australian Companies", Corporate Governance, l3 (2): 188-196

- 115 -

Cooke, T. E., and Wallace, R. S .0 (1990), "Financial Disclosure Regulation and its Environment: A Review and Further Analysis", Journal of Accounting and Public Policy, 9(1): 79-110.

Cooke, (1998).Regression analysis in accounting disclosure studies. Accounting and Business Research, 28(3), 209-224.

Cooke, T. (1991), "An Assessment of Voluntary Disclosure in the Annual Reports of Japanese Corporations", International Journal of Accounting, 26 (I): 174-189.

Core, J. (2001) "A Review of the Empirical Disclosure Literature: Discussion", Journal of Accounting and Economics, 31(1-3): 441-456.

Craswell, A., and Taylor, S. (1992) "Discretionary Disclosure of Reserves by Oil and Gas Companies: An Economic Analysis", Journal of Business Finance and Accounting, 19:295-308

Crowther, D.; and Jatana, R. (2005) "Agency theory: A Cause of Failure in Corporate Governance", in Crowther, D.; and Jatana, R.; (eds), International Dimensions of Corporate Social Responsibility", (1) ICFAI University Press, pp 135-152 available online from http://www.socialresponsibility.bizlwp6 . pdf

Dahawy, K. (2008). Developing Nations and Corporate Governance: The Story of Egypt.

Dahawy, K. and Samah, K. (2010), " An investigation of the views and perceptions of external users of corporate annual reports in emerging economies the case of Egypt", International Journal of Accounting and Finance, 2 (3/4), 331-367.

Dahawy, K., and Conover, T. (2007) "Accounting Disclosure in Companies Listed on the Egyptian Stock Exchange" Middle Eastern Finance and Economics, Issue 1: 5-20

Dahawy, K., Merino, B. and Conover, T. (2002) "The Conflict between lAS Disclosures Requirements and the Secretive Culture in Egypt" Advances in International Accounting Journal, 15:203-228

Darrough, M. and Stoughton, N. (1990), "Financial disclosure policy in an entry game", Journal of Accounting and Economics, 12(1-3): 219-243.

Davis, S. and Menon, K. (1987), "The formation and termination of the cost accounting standards board: Legislative intervention in accounting standard-setting", Journal of Accounting and Public Policy, 6 (3): 185-207.

Davis ,J., Schoorman, F., and Donaldson, L. (1997), "Toward Stewardship Theory of Management ",Academy of Management Review, Vol. 22 No.1, pp. 20-47.

- 116-

Debreceny, R.;and Rahman, A. (2005a) "Finn Specific Determinants of Continuous Corporate Disclosure", The International Journal of Accounting, 40(3) pp.249-278

Debreceny. R.: and Rahman, A. (2005b) "Reply to Discussant's Comment on "Finn Specific Determinants of Continuous Corporate Disclosure", The International Journal of Accounting, 40(3) pp.285-289

Dechow, (1996). Causes and consequences of earnings manipulation: An analysis of firms subject to enforcement actions by the SEC. Contemporary Accounting Research.

Deegan, C. (2002), "The legitimising effect of social and environmental disclosures -a theoretical foundation", Accounting, Auditing & Accountability Journal, 15(3): 282311.

Deegan, c., Rankin, M. and Tobin, 1. (2002), 'An examination of the corporate social and environmental disclosures of BHP from 1983 -1997: A test of legitimacy theory', Accounting, Auditing and Accountability, 15(3): pp. 312-343.

Demertzis, Maria and Andrew Hughes Hallett. "Central Bank Transparency in Theory and Practice," Center for Economic Policy Research Discussion Paper, (2002).

Demski, J. (1974), "Choice Among Financial Reporting Alternatives", Accounting Review,49: 221-232.

Depoers, F. (2000) "A Cost Benefit Study of Voluntary Disclosure: Some Empirical Evidence from French Listed Companies", European Accounting Review 9(2): 245 263.

Dequech, D. (2002), "The Demarcation between the 'Old' and the 'New' Institutional Economics: Recent Complications", Journal of Economic Issues, 36(2): 565-572

Donaldson, L. (1990), The Ethereal Hand: Organizational Economics and Management Theory", Academy o/Management Review, Vol. 15 No.3, pp.369-382.

Donaldson, T. and Preston, L. (1995), "The stakeholder theory of corporation: concepts, evidence, and implications", Academy of Management Review, 20(1): 65 91

Dwivedi, N., and Jain, A.(2005) " Corporate Governance and Performance of India firms : The effect of Board size and Ownership", Employee Responsibilities and Rights Journal, VoU7 No.3, Sept.2005, pp. 161-172.

Dyck, A., and Zingales,L.(2002) ,"The corporate Governance Role of the Media', in: R.Islam (ed.), The Right to Tell: The Role of Mass Media in Economic Development., Washington: The World Bank.

Dye, R. (1986) "Proprietary and Nonproprietary Disclosure", The Journal of Business, 59 (2):331-366.

- 117-

Dye, R. (1990), "Mandatory versus voluntary disclosures: The cases of financial and real externalities", The Accounting Review, 65(1): 1-24.

Eccles, R. and Mavrinac, S. (1995), "Improving the corporate disclosure process", Sloan Management Review, 36(4): 11-25.

Eisenhardt, K. (1989), "Agency Theory: An Assessment and Review", Academy of Management Review, Vol. 14 No.1, pp. 57-74.

Elliott, R. and Jacobson, P. (1994), "Costs and benefits of business information disclosure", Accounting Horizons, 8(4): 80-96.

Eng. L.: and Mak, Y. (2003) "Corporate Governance and Voluntary Disclosure" Journal of Accounting and Public Policy, 22(4): 325-345.

Eric Swanson (2004).Federal Reserve Transparency and Financial Market Forecasts of Short-term Interest Rates. Version 1.2.

Evans, M. (2004).Board characteristics. Firmownership and voluntary disclosure WorkingPaper. Duke University: Fuqua School of Business.

Ezat, A., & EI-Masry, A. (2008). The impact of corporate governance on the timeliness of corporate internet reporting by Egyptian listed companies. Managerial Finance.

Fama, (1980).'Agency problems and the theory of the firm. Journal of Political Economy, 88, 88-307.

Fama, & Jensen, (1983).Separation of ownership and control. Journal of Lawand Economics, 26(2), 301-326 June.

Faust, Jon, John Rogers, Eric Swanson, and Jonathan Wright. "Identifying the Effects of Monetary Policy Shocks on Exchange Rates Using High-Frequency Data," Journal of the European Economic Association 1 (2003).

Ferguson, M. (2002) "Voluntary Disclosure by State- Owned Enterprises Listed on the Stock Exchange of Hong Kong", Journal of International Financial Management and Accounting, 13(2): 125-151

Fishman, M. and K. Hagerty (1989).Disclosure decisions by firms and the competition for price efficiency Journal of Finance .

Fogarty, T. J. (1996) "The imagery and reality of peer review in the U.S.: Insights from institutional theory", Accounting, Organizations and Society, 21(2-3): 243-267.

Forker, (1992).Corporate governance and disclosure quality. Accounting and Business Research, 22, 111-124.

Foster, M M and T J George (1992): "Anonymity in Securities Markets", Journal of Financial Intermediation, Vol 2.

- 118 -

Foster, F D and S Viswanathan (1993): "Variations in Trading Volume, Return Volatility and Trading Costs: Evidence on recent Price Formation Models", Journal of Finance, Vol 48, No 1.

Foster F D and S Viswanathan (1996): "Strategic Trading When Agents Forecast the Forecasts of Others", Journal of Finance, Vol. 51, No 4.

Freeman,R., Wicks, A., and Parmer, B.(2004),"Stakeholder Theory and the Corporate Objective Revisited", Organization Science, Vol. 15 No.3, pp.364-369

Furubotn, E. and Richter, R. (2000) "Institutions and Economic Theory: The Contribution of the New Institutional Economics", The University of Michigan Press.

Garcia-Meca and Sanchez-Ballestabes (2010). The association of board independence and ownership concentration with voluntary disclosure: A meta-analysis. The European Accounting Review, 19(3),603-627.

Ghazali, N. (2004) "Exploring theoretical explanations of voluntary disclosure by quantitative and qualitative investigation: evidence from Malaysia", PhD thesis, University of Strathclyde, UK

Ghazali,& Weetrnan, P. (2006).Perpetuating traditional influences: Voluntary disclosure in Malaysia following the economic crises. Journal of International Accounting, Auditing and Taxation, 15,226-248. Goodstein, (1994). The effects of board size and diversity on strategic change. Strategic Management Journal, 15(3),241-250.

Gompers, Ishii, L. and Metrick, A. (2001), "Corporate Governance and Equity Prices", NBER Working Paper No 8449, Cambridge (Mass.)

Gray, R.; Owen, D.; and Adams, C. (1996) "Accounting and Accountability: Changes and Challenges in Corporate Social Environmental Reporting", Prentice Hall, London

Gray, S. (1988) "Towards a theory of cultural influence on the development of accounting systems internationally", Abacus, 24(1): 1-15.

Gruning. M.: (2007) "Drivers of Corporate Disclosure: a Structural equation analysis in acentral European Setting", Management Research News, 30 (9) 646-660

Gul,& Leung, S. (2004). Board leadership, outside directors' expertise and voluntary corporate disclosures. Journal of Accounting and Public Policy, 23, 1-2.

Guthrie, J., and Parker, L.; (1989); "Corporate Social Reporting: a Rebuttal of Legitimacy Theory"; Accounting and Business Research, 9 (76) pp 343-352.

Haniffa, & Cooke, (2002).Culture, corporate governance and disclosure in Malaysian corporations. Abacus, 38, 317-349.

- 119 -

Haniffa, R.: and Cooke, T. (2005) "The Impact of Culture and Governance on Corporate Social Reporting" Journal of Accounting and Public Policy 24: 391-430

Haniffa, R. (1999) "Culture, Corporate Governance and Disclosure in Malaysian Corporations", PhD. Thesis, University of Exeter, UK

Hassan, M.; (2008) "The Development of Accounting Regulations in Egypt Legitimating the International Accounting Standards", Managerial Auditing Journal, 23 (5): 467-484

Hassan, 0.; (2006) "The Economic Consequences of Increased Disclosure in the Egyptian Emerging Capital Market", PhD, University of Abertay Dundee

Hatch, MJ.and Cunliffe, A. (2006), "Organization theory: Modem, symbolic and post modem perspectives", second edition, Oxford University Press.

Healy, P. and Palepu, K. (2001) "Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature", Journal of Accounting and Economics, 31(1-3): 405-440.

Hermalin, B. E. and M. S.Weisbach (2007).Transparency and corporate govemance.NBER working paper.

Hill, c.; and Jones, T.; (1992) "Stakeholder - Agency Theory", Journal of Management Studies, 29 (2) pp131-154

Hodgson. G. (2000), "What is The Essence of Institutional Economics?", Journal of Economic Issues, 3 (2): 317:329

Hofstede. G. (1980), "Culture's Consequences", Sage Publications.

Hooks. J. (2000) "Construction of a disclosure index to measure accountability", Working Paper, Massey University, New Zealand

Hopper.T. and Armstrong, P. (1991), "Cost Accounting, Controlling Labour and the Rise of Conglomerates", Accounting, Organizations and Society, 16: 105- 120.

Hopwood, A.;(2000) "Understanding Financial Accounting Practice", Accounting, Organization and Society, 25(8): 763-766

Hossain,& Adams, M. B. (1994). Voluntary disclosure in an emerging capital market: Some empirical evidence from companies listed on the KLSE. The International Journal of Accounting, 29(4),334-351.

Hossain, M.; Perera, M.; and Rahman, A. (1995) "Voluntary disclosure in the annual reports of New Zealand companies", Journal of International Financial Management and Accounting, 6(1): 69-85

Huafang, X. and Jianguo, Y., (2007) "Ownership Structure, Board Composition and Corporate Voluntary Disclosure: Evidence from Listed Companies in China", Managerial Auditing Journal 22 (6): 604-619

- 120-

Hussain, M. and Hoque, Z. (2002), "Understanding Non-Financial Performance Measurement Practices in Japanese Banks. A New Institutional Sociology Perspective", Accounting, Auditing & Accountability Journal, lS(2): 162-183.

Hussainey, K., AI-Najjar, B., (forthcoming). Future-oriented narrative reporting: Determinates and use. Journal of Applied Accounting Research.

Hussainey, K., & Wang, M. (2010). Voluntary disclosure and corporate governance: Further UK evidence. Working paper. Stirling University.

Inchausti, A. (1997) "The influence of company characteristics and accounting regulation on information disclosed by Spanish firms", European Accounting Review, 6(1): 4S- 68.

International journal of business, 11(4),2006 ISSN: 1083-4346

Jantadej, P. & Kent, P. (1999), "Corporate Environmental Disclosures in Response to Public Awareness of the Ok Tedi Copper Mine Disaster: A Legitimacy Theory Perspective",Accounting Research Journal, 12(1): 72-88

Jensen, & Meckling, (1976). Theory of the firm:Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(3), 30S-360.

Kamel, H., and Elbanna, S. (2010)," assessing the perceptions of the quality of reported earnings in Egypt", Managerial Auditing Journal, vol. 25 No.32-52.

Kelton, A. S., & Yang, Y. (2008).The impact of corporate governance on internet financial reporting. Journal of Accounting and Public Policy, 27, 62-87.

Khaled Samaha &, Khaled Dahawy &, Khaled Hussainey & Pamela Stapleton (2012) the extent of corporate governance disclosure and its determinants in a developing market: The case of Egypt, a Department of Accounting, The American University in Cairo.

Klapper, L., and Love, L. (2002), "Corporate Governance, Investor Protection, and Performance in Emerging Markets", World Bank. Policy Research paper 2818. Washington DC: World Bank.

Klein, A., (2002) "Economic Determinants of Audit Committee Independence", TheAccounting Review, 77, (2): 41S-433.

Lakhal, F. (200S). Voluntary earnings disclosures and corporate governance: Evidence from France. Review of Accounting and Finance, 4(3), 64-85.

Laksmana, I. (2008). Corporate board governance and voluntary disclosure of executive compensation practices. Contemporary Accounting Research, 25(4), 47-82.

Lang, M.; and Lundholm, R. (1993) "Cross Sectional Determinants of Analyst Ratings of, Corporate Disclosure", Journal of Accounting Research, 31(2), 246-271

- 121 -

Langberg, N. and S. Sivaramakrishnan (2009).Voluntary disclosures and analyst feedback. Forthcoming, Journal of Accounting Research.

La Porta, R., Lopez-de-Silanes, F., and Shleifer, A., and Vishny, R.(1997), "Legal Determinants of External Finance", Journal of Finance, Vol. 2No.3, pp.I131-50.

Leung, S., & Horwitz, B. (2004). Director ownership and voluntary segment disclosure:Hong Kong evidence. Journal of International Financial Management and Accounting,15,235-260.

London Business School, Institute of Finance and Accounting, Working Paper, No 193.

Lyons, R K (1995): "Tests of Micro structural Hypothesis in the Foreign Exchange Market", Journal of Financial Economics, Vol 39.

Madhavan A (1995): "Consolidation, Fragmentation and the Disclosure of Trading Information, Review of Financial Studies, Vol 8, No 3.

Marston, C. and Shrives, P. (1991 ),"The Use of Disclosure Indices in Accounting Research: A Review Article", British Accounting Review, 23 (3): 195-210.

Marston, c.; and Robson, P. (1997) "Financial Reporting in India: Changes in Disclosure over the Period 1982 to 1990", Asia Pacific Journal of Accounting, 4 (1) 109-139

Marston, C., & Polei, A. (2004).Corporate reporting on the internet by German companies". International Journal of Accounting Information Systems, 5, 285-311.

Mattingly, J. E., Steven, A., and Olsen, H.L. (2009).Corporate Implications of theEffects of Stakeholder Management on Financial Reporting. Corporate Governance: An International Review, Vol. 9, No.2: pp. 271-282.

McKinnon, J. L., & Dalimunthe, L. (1993). Voluntary disclosure of segment information by Australian diversified companies. Accounting and Finance, 33(1), 3350(May).

McKnight, P., and Weir, C. (2009),"Agency costs, Corporate Governance Mechanisms and Ownership Structure in Large UK Publicly Quoted companies: A panel Data Analysis The Quarterly Review of Economics and Finance, Vol. 49, pp. 139-158.

McNally. G.; Eng, L.; and Hasseldine, C.; (1982) "Corporate Financial Reporting in NewZealand: An Analysis of User Preferences, Corporate Characteristics and Disclosure Practices for Discretionary Information", Accounting and Business Research, 13 (49):11-19.

Meek. G. and Gray, S. (1989) "Globalization of Stock Markets and Foreign Listing Requirements: Voluntary Disclosures by Continental European Companies Listed on

- 122-

the London Stock Exchange", Journal of International Business Studies, 20(2): 315338.

Meek, G. K., Roberts, C. B., & Gray, S. J. (1995).Factors influencing voluntary annual report disclosures by U.S., U.K. and Continental Europe a multinational corporations. Journal ofInternational Business Studies, 26(3), 555-572.

Meyer, J. and Rowan, B. (1977), "institutionalized organizations: formal structure as myth and ceremony", American Journal of Sociology, 83: 340-363.

Meyer, A., Tsui, A., Rinings, C. (1993) "Configurational approaches to organizational analysis", Academy of Management Journal, 36(6): 1175-1195.

Milne, M. (2002), "Positive accounting theory, political costs And social disclosure analyses: a critical look", Critical Perspectives on Accounting, 13(3): 369-395

Mitchell, (1995). Voluntary disclosure of segment information: Further Australian evidence. Accounting and Finance, 35(2), 1-16.

Mitchell, R .. Agle. B. and Wood, D. (1997), 'Toward a theory of stakeholder identification and salience: Defining the principle of who and what really counts", Academy of Management Review, 22(4): 853-886

Mohammed Omran (2006) Structural Break in the Egyptian Stock Market. Cited by 2 - Related articles ISSN: 1083-4346. A Logistic Regression Analysis. Mohammed Omran. Arab Academy for Science & Technology.

Morris. R. (1987) "Signalling, agency theory and accounting policy choice", Accounting and Business Research, 18(69): 47-56.

Morris, S. and H. S. Shin (2002).Social value of public information. American Economic Review 92.

Muhamad, (2009). Disclosure quality on governance issues in annual reports of Malaysian PLCs. International Business Research, 2(4), 61-72.

Muth, M., and Donaldson, 1. (1998)," Stewardship Theory and Board structure: A contingency approach ", Corporate Governance: An International Review, Vol. 6 No. 1, pp. 5- 28.

Nabli, M. and Nugent, J. (1989) "The New Institutional Economics and its applicability to development", World Development, 17(9): 1333-1347.

Nagar,V. (1999) "The role of the manager's human capital in discretionary disclosure", Journal of Accounting Research, 37: 167-181.

Naik, N, A Neuberger and S Viswanathan (1994): "Disclosure Regulation m Competitive Dealership Markets: An Analysis of the London Stock Exchange",

- 123 -

Naser, K. and Nuseibeh, R. (2003) "Quality of Financial Reporting: Evidence from the Listed Saudi nonfinancial companies", The international Journal of Accounting, 38(1): 41-69

Newman, P.; and Sansing, R.; (1993); "Disclosure Policies with Multiple Users"; Journal of Accounting Research; 31 (1); pp 92-112.

O'Dwyer, B. (2002), "Managerial perceptions of corporate social disclosure: an Irish story", Accolillting, Auditing & Accountability Journal, 15(3): 406-436.

O'Hara M (1995): "Market Microstructure Theory", Cambridge MA, Blackwell.

Okcabol, F.,Tinker. T. (1993), "Dismantling financial disclosure regulations: testing the Stigler-Benston hypothesis", Accounting, Auditing & Accountability Journal, 6 ( 1): 1036.

Olsson. O. (2000), "A Microeconomic Analysis of Institutions", Working Papers In Economics 25, Goteborg University, Department of Economics.

Organization for Economic Cooperation and Development (OECD) 1999.0ECDPrinciples of Corporate Governance. Paris: OECD Publications.

Pagano, M and A Roell (1996): "Transparency and Liquidity: A comparison of Auction and Dealer Markets with Informed Trading", Journal of Finance, Vol 51.

Park, Y., and Shin, H. (2004), " Board composition and earnings management in Canada ",Journal o/Corporate Finance, vol. 10 No.3, pp. 431-57.

Parum, E. (2005) "Does Disclosure on Corporate Governance Lead to Openness and Transparency in How Companies are Managed?", Corporate Governance: An International Review, 13(5): 702 - 709.

Peasnell, K., Pope, P., and Young, S. (2000), Accrual Management to MeetEarnings Targets: UK Evidence Pre- and Post-Cadbury British Accounting Review, Vol. 32, No.4, pp. 415-445.

Penno, M. (1997) "Information Quality and Voluntary Disclosure", The Accounting Review,72(2): 275-284.

Raffoumier, B. (1995) "The Determinants of Voluntary Financial Disclosure by Swiss Listed Companies" European Accounting Review, 4(2):261-280.

Rajdeep Singh and Vijay Yerrarnilli (2010). Can transparency be too much of a good thing ?www.researchgate.net/profilelRajdeep _SinghS/publications/ Article: Can transparency be too much ofa good thing? Rajdeep Singh ... O 1120 1 0; 65(3):927-953. Source.

- 124-

Report on the Observance of Standards and Codes (2001), Corporate governance country assessment, Egypt", available at: www.cma.gov.eglenJpdflEgypt Corporate Governance Web March 2004.pdfl(accessed 26 July 2011).

Riahi-Belkaoui, A.; (2002) "Accounting Theory", Fourth Edition, Thomson, London.

Rizk, R. ;(2006) "Corporate Social and Environmental Disclosure Practices: An International Comparison Of UK, Indian And Egyptian Corporations", PhD thesis, Durham University.

Rizk, R.;Dixon, R.; and Woodhead, A. (2008) "Corporate Social and Environmental Reporting: A Survey of Disclosure Practices in Egypt", Social Responsibility Joumal,;(3): 306-323

Robins. 1. (1987) "Organizational Economics: Notes On The Use Of Transaction­Cost Theory In The Study Of Organizations", Administrative Science Quarterly, 32: 68-86.

Ross, S. (1979), "Disclosure regulation in financial markets: Implications of modern finance theory and signaling theory". In F. Edwards (Ed.), Issues in Financial Regulation, McGraw-Hill

Rowley, T.; (1997) "Moving Beyond Dyadic Ties: A Network Theory of Stakeholder Influences", Academy of Management Review, 22 (4) pp 887-910

Samaha, K. (2010)," Do Board Independence and Audit Committees Motivate Disclosure on Different Corporate Governance Information Categories in the Annual Reports in Developing Countries?, International Research Journal of Finance and Economics, vol. 57, pp. 206-25.

Samaha, K.: and Stapleton, P.; (2008) "Compliance with International Accounting Standards in a national context: Some Empirical Evidence from the Cairo and Alexandria Stock

Sarker,J., Sarker,S., and Sen, K. (2008) " Board of directors and opporturustIc earnings management: evidence from India", Journal of Accounting, Auditing & Finance, vol. 23 No.4, pp. 517-42.

Scalia, A (1998a): "Periodic information asymmetry and intraday market behavior: an empirical analysis", European Finance Review, Vol 1, No 3.

Scalia, a (1998b): "Information Transmission and Causality in the Italian Treasury Bond Market", Journal of Empirical Finance, Vol 5, No 4.

Scapens, R. (1994) "Never Mind the Gap: Towards An Institutional Perspective On Management Accounting Practice", Management Accounting Research, Vol. 5(3.t):301-321

- 125 -

Schadewitz, H.; and Blevins, D. (1998) "Major Determinants ofInterim Disclosures in an Emerging Market", American Business Review 16 (1) pp. 41-55.

Schilling, M. (2000)," Decades Ahead of Her Time; Advancing Stakeholder TheoryThrough the Ideas of Mary Parker Follett",Journal of Management History,Vol. 6No. 5, pp. 224-242.

Schuster, P. and O'connell, V. (2006) "The Trend toward Corporate Voluntary Disclosures", Management Accounting Quarterly, 7 (2): 1-9

Scott, W. R. (1995), "Institutions and Organizations", Sage, Thousand Oaks, CA.

Shaffer, S. (1995) "Rethinking Disclosure Requirements", Business Review, Federal Reserve Bank of Philadelphia, issue May: 15-29

Shen,C. and Chih,H (2007), "Earning Management and corporate governance in Asia's emerging markets," Corporate Governance: An International Review, vol. 15 No.5, pp. 999-1021.

Sheridan, L.: Jones, E. : and Marston, C. (2006) "Corporate Governance Codes and the Supply of Corporate Information in the UK", Corporate Governance: An International Review,14 (5): 497-503

Skinner, D. (1994), "Why Firms Voluntarily Disclose Bad News", Journal of Accounting Research, 32(1): 38-60.

Skinner, D. (1997) "Earnings Disclosures and Stockholder Lawsuits", Journal of Accounting and Economics, 23(3): 249-282

Solomon, J. (2007) "Corporate Governance and Accountability", 2nd edition, John Wiley &Sons

Spero, L. (1979) "The extent and Causes of Voluntary Disclosure of Financial Information in three European Capital markets: An Explanatory Study", PhD thesis, Harvard University)

Sternberg, E. :(1997) "The Defects of Stakeholder Theory", Corporate Governance: an International Review, 5 (I): 3-10

Suwaidan, M. (1997) "Voluntary Disclosure of Accounting Information: The Case of Jordan",PhD thesis, University of Aberdeen

Taplin.R .. Tower, G., and Hancock, P. (2002) "Disclosure (Discernibility) and Compliance of Accounting Policies: Asia-Pacific Evidence." Accounting Forum, 26 (2): 172-190.

Taylor, P. and Turley, S. (1986) "The Regulation of Accounting", Blackwell, Oxford.

The Global Corporate Governance Forum. The International Financial Corporation (IFC). http://www.ifc.org/ifcext/cgf.ns£'AttachmentsByTitle/PaperKhaledDahawy/

- 126-

$FILElDahawy _Kahled4.pdf. The report is published on the website of the International Financial Corporation (IFC) , reporting the status of corporate governance in Egyptian listed companies.

Tsamenyi, 2007,"Disclosure and Corporate Governance in Developing Countries: Evidence from Ghana", Managerial Auditing journal. V 01. 22(3)

Turnbull, S. (1997) "Corporate Governance: Its scope, concerns and theories", Corporate Governance: An International Review, 5(4): 180 - 205

Verrecchia, R. (1983), "Discretionary disclosure", Journal of Accounting and Economics, 5: 179-194.

Verrecchia, R. (1990) "Infonnation Quality and Discretionary Disclosure", Journal of Accounting and Economics, 12(4): 365-80.

Vlachos, C. (2001) "An Empirical Investigation of The Financial Disclosure Practices of Cypriot and Greek Companies", PhD thesis, Middlesex University.

Walker, R. (1985) "The ASRB: Policy Fonnation, Political Activity and Research", Paper Proceedings, Accounting Association of Australia and New Zealand annual conference, Sydney, Australia.

Watson, A.: Shrives, P.: and Marston, C. (2002) "Voluntary Disclosure of Accounting Ratios in the UK". The British Accounting Review, 34 (4): 289-313

\\'atts, R.; and Zimmerman, J. (1986) "Positive Accounting Theory" Prentice-Hall, N.J.

Watts, R.; and Zimmerman, J.(1978), "Towards a positive theory of determination of accounting standards", Accounting Review, 53: 112-134.

Waymire, G. (1984), "Additional evidence on the information content of management earnings forecasts", Journal of Accounting Research, 22: 703-719.

Wolfe, R. and Putler, D. (2002) "How Tight Are The Ties That Bind Stakeholder Groups?",Organization Science, 13(1): 64-80.

Xie,B.,Davidson,W.,andDaDalt,P.(2003) "Earnings management and corporate governance: the role of the board and the audit committee ",Journal o/Corporate Finance, vo1.9, pp. 295-316.

Yasdifar, H. (2003), "Management accounting in the twenty-fIrst-century finn: a strategic view", Strategic Change, Vol. 12 No.2, pp.109-113

Yerrnack, D. (1996) "Higher Market Valuation of Companies with a Small Board of Directors", Journal of Financial Economies, 40: 185-221

- 127 -

DIS

332.642 lO-CO

76862 C2

CORPORATE GOVERNANCE EFFECTIVENESS AND VOLUNTARY I1ISCLOSURES: AN EMPIRICAL

""'" 7686:2

j J

j j j j j j j j

j j j j j j j j j j j j j j j j j

j j j j j j j j j j j j j j j j j

j j j j j j j j j

j j j j

j j

j

j j j j