Corporate Internet Reporting and Firm Performance : Evidence from Malaysia

• Autorzy: Chai J Sia , Rayenda Brahmana , Gesti Memarista
• Języki publikacji: EN

Abstrakty

EN

Anecdotal evidence showed that the portion of internet users to the population in Malaysia is relatively higher among developing economies. However, there are not many Malaysian listed companies that use the internet as a platform for financial information disclosure. Perhaps, the managers do not believe that there is positive association between internet reporting and firm performance. Therefore, this study aims to examine the impact of corporate internet reporting (CIR) on firm performance for a sample of 583 non-financial listed companies in Malaysia over the year of 2013. We use content analysis to retrieve the internet reporting items and test its validity and reliability before running the regression model. The findings showed that CIR has a significant effect on firm value. This means that more related information that is regularly disclosed on the company's websites can contribute more value to the firms. Meanwhile, company size does not significantly influence firm value. The firm's leverage is negative and statistically significant, and the growth brings a positive significant effect to the firm's value. In addition, in this study, the results support the resource-based view theory and the signaling theory between corporate internet reporting and firm value. The findings of the research suggest that companies should disclose more information through the internet in order to ensure the accessibility of financial information for stakeholders, and this will present a better image and reputation of the company's best practices in financial performance. CIR will help them to have meaningful investment decisions and persuade them to invest in the company. (original abstract)

Słowa kluczowe

EN

Internet users; Reporting; Financial statements

PL

Użytkownicy internetu; Raportowanie; Sprawozdanie finansowe

• Czasopismo: Contemporary Economics
• Rocznik: 2018
• Tom: 12
• Numer: nr 2
• Strony: 153--164

Twórcy

autor

Chai J Sia

• Universiti Malaysia Sarawak, Malaysia

autor

Rayenda Brahmana

• Universiti Malaysia Sarawak, Malaysia

autor

Gesti Memarista

• Universitas Kristen Petra, Indonesia

Bibliografia

• Adhikari A. & Tondkar R.H. (1992). Environmental factors influencing accounting disclosure requirements of global stock exchanges. Journal of International Financial Management and Accounting, 4(2), 75-105.
• Aly D., Simon J. & Hussainey K. (2010). Determinants of corporate internet reporting: Evidence from Egypt. Managerial Auditing Journal, 25(2), 182-202.
• Bakos J.Y. (1991). A strategic analysis of electronic marketplaces. MIS Quarterly, 15(3), 295-310.
• Barney J., & Ray G.A.U.T.A.M. (2015). How information technology sources can provide a competitive advantage in customer service. Planning for Information Systems, 3(2), 444-460.
• Barua A., Kriebel C.H., & Mukhopadhyay T. (1995). Information technologies and business value: An analytic and empirical investigation. Information Systems Research, 6(1), 3-23.
• Beaver W.H. (1968). The information content of annual earnings announcements. Journal of Accounting Research, 6, 67-92.
• Becker G.S. (1967). Human capital and the personal distribution of income: An analytical approach. An Arbor, MI: Institute of Public Administration.
• Bharadwaj A.S., Bharadwaj S.G., & Konsynski B.R. (1999). Information technology effects on firm performance as measured by Tobin's q. Management Science, 45(7), 1008-1024.
• Brown R.M., Gatian A.W., & Hicks Jr. J.O. (1995). Strategic information systems and financial performance. Journal of Management Information Systems, 11(4), 215-248.
• Brush T.H., Bromiley P., & Hendrickx M. (2000). The free cash flow hypothesis for sales growth and firm performance. Strategic Management Journal, 21(4), 455-472.
• Brynjolfsson E. & Hitt L. (1996). Paradox lost? Firmlevel evidence on the returns to information systems spending. Management Science, 42(4), 541-558.
• Chao C.F., Hsu C.C., & Yeh H.S. (2010). The relationship between information transparency and firm value: Evidence from Taiwan. International Journal Business Excellence, 3(2), 125-141.
• Check I.T., Mohamad Z.Z.B., Yunus J.N. & Norwami N.M. (2013). Corporate social responsibility (CSR) disclosure in consumer products and plantation industry in Malaysia. American International Journal of Contemporary Research, 3(5), 118-125.
• Cho H.J., & Pucik V. (2005). Relationship between innovativeness, quality, growth, profitability, and market value. Strategic Management Journal, 26(6), 555-575.
• Chung K.H., & Pruitt S.W. (1994). A simple approximation of Tobin's q. Financial Management, 23(3), 70-74.
• Craven B.M. & Marston C.L. (1999). Financial reporting on the internet by leading UK companies. The European Accounting Review, 8(2), 321-333.
• Daft R.L. (1983). Organization theory and design. St. Paul, MN: West Publishing Company.
• Denis D.J., Denis D.K., & Yost K. (2002). Global diversification, industrial diversification, and firm value. The Journal of Finance, 57(5), 1951-1979.
• Diamond D.W. & Verrecchia R.E. (1991). Disclosure, liquidity and the cost of capital. The Journal of Finance, 46(4), 1325 - 1359.
• Errunza V.R., & Senbet L.W. (1984). International corporate diversification, market valuation, and size-adjusted evidence. The Journal of Finance, 39(3), 727-743.
• Fauver L., Houston J.F., & Naranjo A. (2004). Crosscountry evidence on the value of corporate industrial and international diversification. Journal of Corporate Finance, 10(5), 729-752.
• Fauzi F., & Locke S. (2012). Board structure, ownership structure and firm performance: A study of New Zealand listed-firms. Asian Academy of Management Journal of Accounting and Finance, 8(2), 43-67.
• Gujarati D.N., & Porter D.C. (2009). Basic econometrics (5th ed.). Boston, MA: McGraw-Hill.
• Grant R.M. (1991). The resource-based theory of competitive advantage: Implications for strategy formulation. Knowledge and Strategy, 33(3), 114-135.
• Hanafi S.R.B.M., Kasim M.A.B., Ibrahim M.K.B., & Hancock D.R. (2009). Business reporting on the internet: Development of a disclosure quality index. International Journal of Business and Economics, 8(1), 455-479.
• Haniffa R., & Hudaib M. (2006). Corporate governance structure and performance of Malaysian listed companies. Journal of Business Finance and Accounting, 33(7-8), 1034-1062.
• Hansen J.V. (2001). Internet commerce security: Issues and models for control checking. The Journal of the Operational Research Society, 52(10), 1159-1164.
• Hermalin B.E., & Weisbach M.S. (2012). Information disclosure and corporate governance. The Journal of Finance, 67(1), 195-233.
• Heye D. (2009, September 28). ACORN Story shows how internet reporting is beating The New York Times. Retrieved from http://www.usnews.com/opinion/blogs/doug-heye/2009/09/28/acorn-story-shows-how-internet-reporting-is-beating-thenew-york-times
• Ho S.S.M., & Wong K.S. (2001). A study of the relationship between corporate governance structures and the extent of voluntary disclosure. Journal of International Accounting, Auditing and Taxation, 10(2), 139-156.
• Hunter S.A., & Smith L.M. (2009). Impact of internet financial reporting on emerging markets. Journal of International Business Research, 8(2), 21-40.
• Hussey R. & Sowinska M. (1999). The risks of financial reports on the internet. Accounting and Business, 3, 18-19.
• Jones M.J. & Xiao J.Z. (2003). Internet reporting: current trends and trends by 2010. Accounting Forum, 27(2), 132-165.
• Kelton A.S., & Yang Y.W. (2008). The impact of corporate governance on internet financial reporting. Journal of Accounting and Public Policy, 27(1), 62-87.
• Khan M.N.A.A. & Ismail N.A. (2011). The level of internet financial reporting of Malaysian companies. Asian Journal of Accounting and Governance, 2, 27-39.
• Krishnan G.V., & Sriram R.S. (2000). An examination of the effect of it investments on firm value: The case of Y2K-compliance costs. Journal of Information Systems, 14(2), 95-108.
• Lai S.C., Lin C., Li H.C., & Wu F.H. (2010). An empirical study of the impact of internet financial reporting on stock prices. The International Journal of Digital Accounting Research, 10, 1-26.
• Lazarides T., Drimpetas E., Argyropoulou M. & Motwani J. (2009), Corporate governance and the information systems excellence factor. International Journal of Business Excellence, 2(1), 16-29.
• Li Y., & McConomy B.J. (1999). An empirical examination of factors affecting the timing of environmental accounting standard adoption and the impact on corporate valuation. Journal of Accounting, Auditing and Finance, 14(3), 279-313.
• Marston C., & Polei A. (2004). Corporate reporting on the internet by German companies. International Journal of Accounting Information Systems, 5(3), 285-311.
• Mata F.J., Fuerst W.L., & Barney J.B. (1995). Information technology and sustained competitive advantage: A resource-based analysis. MIS Quarterly, 19(4), 487-505.
• Miller M.H., & Rock K. (1985). Dividend policy under asymmetric information. The Journal of Finance, 40(4), 1031-1051.
• Mithas S. & Rust R.T. (2016). How information technology strategy and investments influence firm performance: Conjectures and empirical evidence. MIS Quarterly, 40(1), 223-245.
• Myers S.C. (1984). The capital structure puzzle. The Journal of Finance, 39(3), 575-592.
• Naceur S.B., & Goaied M. (2002). The relationship between dividend policy, financial structure, profitability and firm value. Applied Financial Economics, 12(12), 843-849.
• Peteraf M.A. (1993). The cornerstones of competitive advantage: A resource-based view. Strategic Management Journal, 14(3), 179-191.
• Porter M. (1985). Competitive strategy. New York, NY: Free Press.
• Shehata N.F. (2014). Theories and determinants of voluntary disclosure. Accounting and Finance Research, 3(1), 18-26.
• Spence M. (1973). Job market signaling. The Quarterly Journal of Economics, 87(3), 355-374.
• Statista. (2014). Number of worldwide internet users from 2000 to 2015 (in millions). Available at http://www.statista.com/statistics/273018/number-ofinternet-users-worldwide/
• Tomer J.F. (1987). Organizational capital: The path to higher productivity and well-being. New York, NY: Praeger.
• Williamson O.E. (1975). Markets and hierarchies. New York, NY: Free Press.
• Willis M., Tesnie're B. & Jones A. (2003). Corporate communications for the 21st century. A white paper discussing the impact of internet technologies on business reporting. New York, NY: PricewaterhouseCoopers.
• Wolfe J., & Sauaia A.C.A. (2003). The Tobin q as a business game performance indicator. Developments in Business Simulation and Experiential Learning, 36(2), 238-249.

Identyfikatory

DOI

10.5709/ce.1897-9254.269