The Effect of National Characteristics on Corporate Disclosure Practices: A Case of ASEAN

Abstract

This paper aims to extend existing literature by indicating the linkage between national institutions and disclosure practices based on a perspective of a group of developing countries, namely ASEAN. Using a sample of 111 non-financial listed companies in five ASEAN countries, covering Indonesia, Malaysia, the Philippines, Singapore, and Thailand, from 2011 to 2015, the empirical result reveals that the extent of corporate disclosure in ASEAN is positively related to the level of regulation quality at 99% confidence levels and positively associated with the level of rule of law at 95% confidence levels, meaning that businesses tend to disclose more information when government agencies provide suitable policies that help to facilitate business growth and serious concern about the quality of contract enforcement. On the other hands, the finding also demonstrates that the level of corporate is negatively connected with the level of political stability and absence of violence, the level of government effectiveness, and the level of control of corruption, meaning that the level of corporate disclosure in ASEAN would be increased when the national environment is unstable and improper for investing in new projects, the government lacks capabilities to promote economic development, and the country has a high rate of corruption. The paper contributes to international disclosure literature by extending an understanding of the effects of national factors on disclosure practices. Distinct from the mainstream of disclosure literature, the obtained results could provide empirical evidence not only for regulators who want to reinforce the regional regulations.

Keywords: National Characteristics, Corporate Disclosure, ASEAN, Panel Data Analysis, Listed Company