THE EFFECT OF FIRM PERFORMANCE ON VOLUNTARY DISCLOSURE IN ANNUAL REPORTS: A CASE STUDY OF TECHNOLOGY INDUSTRY IN THE STOCK EXCHANGE OF THAILAND
Abstract
Information disclosure has played an important role in solving information asymmetry problem among administrative team as insider and stakeholder as outsider. Studies concerning on voluntary information disclosure have mostly emphasized on factors determining voluntary information disclosure. Unlike others, this study intends to apply signaling theory in explaining firms signaling strategy through voluntary information disclosure as positive signal for its better performance. According to this hypothesis, high performance firms are more likely to voluntary disclose additional information to public in order to gain advantage from this positive signal. The study employs Random-effects Tobit Models of the listed companies in technology industry during 2009 to 2013 by using return on asset (ROA) and Tobin’s Q as measurement index of performance. The result of the overall information disclosure shows significant effects of firm performance on voluntary disclosure. However, disaggregate analyses by classifying data into strategy information, non-financial information, and financial information, indicate that voluntary disclosure of strategy information and nonfinancial information are influenced by firm performance while disclosure of financial information is not.
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