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Corporate Transparency Differences in the Asian Region: the Feasibility of Global Standardization in Practice?
Richard D. Morris,
University of New South Wales
Sidney J. Gray, University of Sydney
ABSTRACT. Using a unique hand-collected dataset covering 434 companies from 12 Asian countries, we examine whether countries matter more than firms in explaining financial transparency. Two IFRS-based checklists are used to measure transparency. Our data cover more companies per country, in greater depth, than CLSA, CIFAR or Standard & Poor’s datasets. Both transparency measures differ significantly across countries. Country-level variables matter more than firm-level variables in explaining variance in most model specifications. Legal system, bank-oriented economy and enforcement of standards matter most at the country-level. Firm complexity, debt raising, auditor-type, firms’ international focus and foreign stock exchange listings are consistently associated with transparency across model specifications. Our findings suggest that converging accounting practices in the region short-term will not be easy, although there are market-based forces which may help convergence long-term.
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