Tone disclosure and financial performance: evidence from Egypt

Abstract

Purpose This paper aims to examine the extent to which financial performance (FP) represents one of the main determinants for tone disclosure (TD) in Egyptian annual reports. The authors also measure the bidirectional relationship between TD and FP. Design/methodology/approach The manual content analysis is used to measure the levels of TD in annual reports for a sample of 105 firms listed on the Egyptian stock market. The sample covers a three-year period (2011-2013). Findings The descriptive analysis in this paper shows that Egyptian firms disclose more good news than bad news. Therefore, the net news disclosure, or net variances, between good/bad is positive. The empirical analysis shows a positive association between the narrative disclosure of good/bad news and FP based on return on assets. The authors also find a highly significant association between the auditor, profitability, leverage, firm growth and financial reporting of good/bad news information. Finally, the results of the ordinary least squares regression show that the causality between the two endogenous variables runs from FP to TD. Thus, TD is determined by FP. Originality/value This study offers a novel contribution to disclosure studies by being the first study to examine TD in one of the developing countries.

CSR Expenditure and Company Performance: Charity or Signal? Evidence from Indonesia

“…CSR activity in the form of charity is one of the activities which aims as a form of the corporate's response to social demands. In addition, charitable giving through CSR activities by corporates can build the corporate's reputation in society (Aly, El-Halaby and Hussainey, 2018).…”

The Association between Impression Management and Financial Performance in the Boards of Directors’ Annual Reports for Egyptian listed companies: The Moderating Effect of the CEO’s Power

“…In addition, the regulatory steps, undertaken to attract foreign investors, increased the importance of investigating the Egyptian environment. Second, the Egyptian environment has witnessed many economic and political changes over the last ten years which may have impacted on the accounting profession generally and, more specifically, on the narrative disclosure (Aly, 2018). Third, there are lack of narrative disclosure studies conducted in the developing countries.…”

“…Few studies explored DT in the developing countries and, more specifically, in Egypt (e.g. Aly et al 2018). Second, the previous studies of either developed or developing countries did not consider widely the bidirectional association between IM strategy and company FP.…”

“…Second, the previous studies of either developed or developing countries did not consider widely the bidirectional association between IM strategy and company FP. Although Aly et al (2018) investigated such an association, this study focuses mainly on IM strategy. In addition, this study uses different measures of company FP to those used by Aly et al (2018).…”

“…Although Aly et al (2018) investigated such an association, this study focuses mainly on IM strategy. In addition, this study uses different measures of company FP to those used by Aly et al (2018).…”