Tone Disclosure and Financial Performance: Evidence from Egypt

Aly, Doaa A ORCID: 0000-0002-2037-6879, Hussainey, Khaled and Elhalaby, Sherif (2018) Tone Disclosure and Financial Performance: Evidence from Egypt. Accounting Research Journal, 31 (1). pp. 63-74. doi:10.1108/ARJ-09-2016-0123

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This paper examines to what extent financial performance (FP) represents one of the main determinants for tone disclosure (TD) in Egyptian annual reports. We also measure the bidirectional relationship between TD and FP. We use the manual content analysis to measure levels of TD in annual reports for a sample of 105 firms listed on the Egyptian stock market. Our sample covers a three-year period (2011–2013). Our descriptive analysis 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 (ROA). We 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 (OLS) regression show that the causality between the two endogenous variables runs from FP to TD . Thus, TD is determined by FP. We offer a novel contribution to disclosure studies by being the first study to examine tone disclosure in one of the developing countries.

Item Type: Article
Article Type: Article
Uncontrolled Keywords: Financial performance (FP); Tone disclosure (TD); Egypt; REF2021
Subjects: H Social Sciences > HG Finance > HG4001 Finance management. Business finance
Divisions: Schools and Research Institutes > School of Business, Computing and Social Sciences
Research Priority Areas: Applied Business & Technology
Depositing User: Susan Turner
Date Deposited: 28 Jun 2017 12:59
Last Modified: 31 Jul 2023 09:59

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