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The Effect Of Globalization And Legal Environment On Voluntary Disclosure, Kimberley A. Webb, Steven Cahan, Jerry Sun
The Effect Of Globalization And Legal Environment On Voluntary Disclosure, Kimberley A. Webb, Steven Cahan, Jerry Sun
Odette School of Business Publications
We examine how interactions with foreign capital, product, and labor markets affect the disclosure practices of non-U.S. multinational firms. Drawing on literature related to multinationals, country-level legal institutions, and accounting disclosures, we expect that the relation between globalization and voluntary disclosure will be conditioned by the legal environment in a firm's home country. Specifically, while firms from countries with a strong legal environment (e.g., common-law countries) already face pressure for good disclosure, globalization can increase the benefits associated with good disclosure to firms from weak legal environments (e.g., civil-law countries). We use a self-constructed voluntary disclosure index and hand-collected disclosure …