TY - JOUR
T1 - Future-oriented narrative reporting
T2 - Determinants and use
AU - Hussainey, Khaled
AU - Al-Najjar, Basil
PY - 2011/9/13
Y1 - 2011/9/13
N2 - Purpose The purpose of this paper is to examine the determinants of future-oriented information in UK annual report narrative sections. The paper also investigates the association between corporate dividend policy and levels of future-oriented information, as a proxy for information asymmetry. Design/methodology/approach A computer-based-content analysis is used to measure levels of future-oriented information. Tobit and logit regressions are then applied in order to examine the impact of firm characteristics, and corporate governance characteristics on future-oriented disclosure. In further tests, Tobit and logit regression models are used to investigate the association between corporate dividend policy and levels of future-oriented information. Findings The authors find that firm size is the main factor affecting the firms' levels of future-oriented information. This variable is statistically significant in five regression models. In addition, the authors find that profitability, outsider directorships, and insider ownerships affect the levels of future-oriented information. However, the significance of these variables depends on whether fixed effects or random effects models are used and whether year dummies are included or excluded in the analyses. Finally, the authors find a positive association between corporate dividend policy and information asymmetry (measured by the levels of future-oriented information). Originality/value This paper contributes to the existing disclosure studies in two crucial ways. First, it offers the first evidence that levels of future-oriented information are driven by some firm characteristics, and some corporate governance mechanisms. Second, it offers the first UK evidence of the association between corporate dividend policy and information asymmetry. The results show that dividends and information asymmetry are negatively associated.
AB - Purpose The purpose of this paper is to examine the determinants of future-oriented information in UK annual report narrative sections. The paper also investigates the association between corporate dividend policy and levels of future-oriented information, as a proxy for information asymmetry. Design/methodology/approach A computer-based-content analysis is used to measure levels of future-oriented information. Tobit and logit regressions are then applied in order to examine the impact of firm characteristics, and corporate governance characteristics on future-oriented disclosure. In further tests, Tobit and logit regression models are used to investigate the association between corporate dividend policy and levels of future-oriented information. Findings The authors find that firm size is the main factor affecting the firms' levels of future-oriented information. This variable is statistically significant in five regression models. In addition, the authors find that profitability, outsider directorships, and insider ownerships affect the levels of future-oriented information. However, the significance of these variables depends on whether fixed effects or random effects models are used and whether year dummies are included or excluded in the analyses. Finally, the authors find a positive association between corporate dividend policy and information asymmetry (measured by the levels of future-oriented information). Originality/value This paper contributes to the existing disclosure studies in two crucial ways. First, it offers the first evidence that levels of future-oriented information are driven by some firm characteristics, and some corporate governance mechanisms. Second, it offers the first UK evidence of the association between corporate dividend policy and information asymmetry. The results show that dividends and information asymmetry are negatively associated.
KW - Annual reports
KW - Content analysis
KW - Dividend policy
KW - Future-oriented information
KW - Narrative reporting
KW - United Kingdom
UR - http://www.scopus.com/inward/record.url?scp=84855678213&partnerID=8YFLogxK
U2 - 10.1108/09675421111160691
DO - 10.1108/09675421111160691
M3 - Article
AN - SCOPUS:84855678213
VL - 12
SP - 123
EP - 138
JO - Journal of Applied Accounting Research
JF - Journal of Applied Accounting Research
SN - 0967-5426
IS - 2
ER -