This paper examines whether a firm's level of voluntary disclosure varies with its level of global diversification. We argue that information asymmetries and agency costs arising from the global diversification of operations and financing increase the incentives for firms to disclose at a higher level. We measure global diversification of operations by factor‐analyzing foreign shareholdings and foreign debt, and we measure global diversification of financing by factor‐analyzing foreign sales and foreign subsidiaries. Using a sample of 216 firms from 17 countries selected from Fortune's Global 500 list and Botosan's (1997) disclosure index, we find that the level of voluntary disclosure is positively related to the extent of global operations, but is not related to the extent of global financing.
Skip Nav Destination
Research Article| January 01 2005
Global Diversification and Corporate Disclosure
Steven F. Cahan, Professor;
Asheq Rahman, Associate Professor;
Online Issn: 1558-8025
Print Issn: 1542-6297
American Accounting Association
Journal of International Accounting Research (2005) 4 (1): 73–93.
- Views Icon Views
- Share Icon Share
- Search Site
Steven F. Cahan, Asheq Rahman, Hector Perera; Global Diversification and Corporate Disclosure. Journal of International Accounting Research 1 January 2005; 4 (1): 73–93. https://doi.org/10.2308/jiar.2005.4.1.73
Download citation file: