Determinants of corporate financial disclosure in an unregulated environment: evidence from the early 20th century.

W. Van Overfelt, M. Deloof, A. Vanstraelen

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

We investigate the determinants of corporate financial reporting in an unregulated setting. Prior to the First World War, limited liability companies in Belgium were obliged to publish financial statements, but financial reporting was virtually unregulated. Investor protection was generally very poor. Nevertheless, Belgian stock markets were booming. While the amount of information disclosed in the financial statements was generally low relative to the current levels of disclosure, there was significant variation in financial reporting across firms. Our results suggest that financial reporting was significantly affected by universal bank affiliations, bond financing and stock returns. Dividends were a substitute for income statement transparency.
Original languageEnglish
Pages (from-to)7-34
Number of pages28
JournalEuropean Accounting Review
Volume19
Issue number1
DOIs
Publication statusPublished - 1 Jan 2010

Keywords

  • DIVIDEND POLICY
  • CASH FLOW
  • INFORMATION
  • BELGIUM
  • 20TH-CENTURY
  • PERFORMANCE
  • EARNINGS
  • MARKETS
  • COSTS

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