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The power of governance: unraveling the influence of voluntary disclosure on bank’s value in Pakistan

The power of governance: unraveling the influence of voluntary disclosure on bank’s value in... This study aims to examine the influence of voluntary disclosure on bank value in Pakistan, considering the moderating effect of corporate governance characteristics: ownership control, board independence and board size.Design/methodology/approachThe study uses data from 20 listed Pakistani banks for the period 2011–2021. The estimation contains robust fixed effect and its assumptions, and a model of standard error with panel corrections.FindingsThe findings revealed a weak positive impact of voluntary disclosure on bank value. However, the increase in the number of independent directors strengthens the positive impact of voluntary disclosure on a bank’s value. Conversely, increasing the ownership concentration, and board size (other than independent directors) may strongly decrease the impact of voluntary disclosure on a bank’s value in Pakistan.Research limitations/implicationsThe study’s limitations include its exclusive focus on the Pakistani banking industry. Future research should take into account newer contexts and data. The findings suggest that future research should investigate the topic in various contexts, including a comparison of Islamic and conventional banks.Practical implicationsThe practical implications for Pakistani banks emphasize transparency, board composition and ownership structure. In terms of managerial implications, using independent directors, aligning ownership interests and addressing disclosure challenges are highlighted.Originality/valueFocusing on independent directors, ownership concentration and board size, this study enhances knowledge of the impact of voluntary disclosure on bank value in Pakistan. It contributes to agency theory and the literature in this domain. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Corporate Governance Emerald Publishing

The power of governance: unraveling the influence of voluntary disclosure on bank’s value in Pakistan

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References (112)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1472-0701
eISSN
1472-0701
DOI
10.1108/cg-07-2023-0294
Publisher site
See Article on Publisher Site

Abstract

This study aims to examine the influence of voluntary disclosure on bank value in Pakistan, considering the moderating effect of corporate governance characteristics: ownership control, board independence and board size.Design/methodology/approachThe study uses data from 20 listed Pakistani banks for the period 2011–2021. The estimation contains robust fixed effect and its assumptions, and a model of standard error with panel corrections.FindingsThe findings revealed a weak positive impact of voluntary disclosure on bank value. However, the increase in the number of independent directors strengthens the positive impact of voluntary disclosure on a bank’s value. Conversely, increasing the ownership concentration, and board size (other than independent directors) may strongly decrease the impact of voluntary disclosure on a bank’s value in Pakistan.Research limitations/implicationsThe study’s limitations include its exclusive focus on the Pakistani banking industry. Future research should take into account newer contexts and data. The findings suggest that future research should investigate the topic in various contexts, including a comparison of Islamic and conventional banks.Practical implicationsThe practical implications for Pakistani banks emphasize transparency, board composition and ownership structure. In terms of managerial implications, using independent directors, aligning ownership interests and addressing disclosure challenges are highlighted.Originality/valueFocusing on independent directors, ownership concentration and board size, this study enhances knowledge of the impact of voluntary disclosure on bank value in Pakistan. It contributes to agency theory and the literature in this domain.

Journal

Corporate Governance – Emerald Publishing

Published: Aug 27, 2024

Keywords: Voluntary disclosure; Banks’ value; Corporate governance characteristics; Panel data; Banking sector of Pakistan; B23; C23; D22; G21; G32; G34; L25

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