Financial distress and corporate transparency/opacity: The role of firm visibility

Author(s)

Cemil Kuzey, Ali Uyar, Shaista Wasiuzzaman, Abdullah S. Karaman, Petra Inwinkl

Abstract

This study investigated whether financially distressed firms become more transparent or more opaque and whether firm visibility plays a significant role in firms’ engagement with sustainability reporting practices. We drew on a global sample of records from between 2005 and 2019 (including 10 sectors). The findings showed that financially distressed firms avoid publishing sustainability reports, obtaining independent assurance for these reports, and crafting the reports according to the GRI framework. Furthermore, we found that financially distressed firms with higher visibility are more likely to issue sustainability reports, follow GRI guidelines in crafting these reports, and have the reports assured by an external verifier.

Organisation(s)

Department of Accounting, Innovation and Strategy

External organisation(s)

Murray State University (MSU), Excelia Business School, Universiti Teknologi Brunei, American University of the Middle East

Journal

International Review of Economics & Finance

Volume

88

Pages

766-798

No. of pages

33

ISSN

1059-0560

DOI

https://doi.org/10.1016/j.iref.2023.07.019

Publication date

11-2023

Peer reviewed

Yes

Austrian Fields of Science 2012

502052 Business administration

Keywords

ASJC Scopus subject areas

Economics and Econometrics, Finance

Portal url

https://ucris.univie.ac.at/portal/en/publications/financial-distress-and-corporate-transparencyopacity-the-role-of-firm-visibility(0da636c5-6d40-4dac-a9c7-b8978d79f8e2).html