The Relationship between Risk Disclosures and Firm Performance: Empirical Evidence from GCC
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Kukreja, Gagan , Thesis advisor
Subject
Description
Abstract
This study aims to investigate the moderating effect of Risk Management Disclosure (RMD) on the relationship between Risk Disclosure (RD) and firm performance to add to the growing body of literature on RMD by obtaining new evidence from a rapidly growing economic
environment in Gulf countries. This study covers eighty (80) non-financial Gulf Cooperation Council (GCC) firmsregistered on the GCC Stock Exchanges(SE) with various factors throughout a 10-year period beginning in 2012. Data was gathered from Thomson Reuters, annual reports, and individual firm financial statements. Pearson’s r (or Pearson’s correlation) was used to evaluate the linear relationship between each pair of the study variables, while multiple regression was used to investigate the moderating effect of RMD on the relationship between RD and firm performance, while controlling for Firm Size, Firm Age (FA), Board of Directors (BOD) Size, Big 4, and Sector (fractioned into 9 dummy variables, with the industrial sector being the reference category).
Pearson’s r (or Pearson’s correlation) was used to evaluate the linear relationship between each pair of the study variables, while multiple regression was used to see the effect of RD, RMD, and their interaction on EPS, while controlling for Big 4, FA, BOD, size, and sector. SPSS v26
software was used to obtain descriptive statistics and multiple linear regression using the HC03 Robust Standard Errors method, while R-software v4.1.3 was used to obtain multiple regression using the bootstrapping technique (using the “boot” package).
The findings revealed that RD had no significant influence on Earning Per Share (EPS) however, RMD had a significant negative influence on EPS. Furthermore, there is no significant interaction between RD and RMD; this suggests that whether RMD is low or high, RD does not
affect EPS (and vice versa: whether RD is low or high, RMD still has the same strength of effect on EPS). The Big 4 and sectors were the only control factors that had a substantial impact on EPS.
The findings of this research will assist practitioners in reevaluating the interactions between their
activities for RD and RMD on a firm's performance.
Keywords:
Risk Disclosure, Risk Management Disclosure, Firm Performance, Gulf Countries.
This study aims to investigate the moderating effect of Risk Management Disclosure (RMD) on the relationship between Risk Disclosure (RD) and firm performance to add to the growing body of literature on RMD by obtaining new evidence from a rapidly growing economic
environment in Gulf countries. This study covers eighty (80) non-financial Gulf Cooperation Council (GCC) firmsregistered on the GCC Stock Exchanges(SE) with various factors throughout a 10-year period beginning in 2012. Data was gathered from Thomson Reuters, annual reports, and individual firm financial statements. Pearson’s r (or Pearson’s correlation) was used to evaluate the linear relationship between each pair of the study variables, while multiple regression was used to investigate the moderating effect of RMD on the relationship between RD and firm performance, while controlling for Firm Size, Firm Age (FA), Board of Directors (BOD) Size, Big 4, and Sector (fractioned into 9 dummy variables, with the industrial sector being the reference category).
Pearson’s r (or Pearson’s correlation) was used to evaluate the linear relationship between each pair of the study variables, while multiple regression was used to see the effect of RD, RMD, and their interaction on EPS, while controlling for Big 4, FA, BOD, size, and sector. SPSS v26
software was used to obtain descriptive statistics and multiple linear regression using the HC03 Robust Standard Errors method, while R-software v4.1.3 was used to obtain multiple regression using the bootstrapping technique (using the “boot” package).
The findings revealed that RD had no significant influence on Earning Per Share (EPS) however, RMD had a significant negative influence on EPS. Furthermore, there is no significant interaction between RD and RMD; this suggests that whether RMD is low or high, RD does not
affect EPS (and vice versa: whether RD is low or high, RMD still has the same strength of effect on EPS). The Big 4 and sectors were the only control factors that had a substantial impact on EPS.
The findings of this research will assist practitioners in reevaluating the interactions between their
activities for RD and RMD on a firm's performance.
Keywords:
Risk Disclosure, Risk Management Disclosure, Firm Performance, Gulf Countries.
Note
Abstract
This study aims to investigate the moderating effect of Risk Management Disclosure (RMD) on the relationship between Risk Disclosure (RD) and firm performance to add to the growing body of literature on RMD by obtaining new evidence from a rapidly growing economic
environment in Gulf countries. This study covers eighty (80) non-financial Gulf Cooperation Council (GCC) firmsregistered on the GCC Stock Exchanges(SE) with various factors throughout a 10-year period beginning in 2012. Data was gathered from Thomson Reuters, annual reports, and individual firm financial statements. Pearson’s r (or Pearson’s correlation) was used to evaluate the linear relationship between each pair of the study variables, while multiple regression was used to investigate the moderating effect of RMD on the relationship between RD and firm performance, while controlling for Firm Size, Firm Age (FA), Board of Directors (BOD) Size, Big 4, and Sector (fractioned into 9 dummy variables, with the industrial sector being the reference category).
Pearson’s r (or Pearson’s correlation) was used to evaluate the linear relationship between each pair of the study variables, while multiple regression was used to see the effect of RD, RMD, and their interaction on EPS, while controlling for Big 4, FA, BOD, size, and sector. SPSS v26
software was used to obtain descriptive statistics and multiple linear regression using the HC03 Robust Standard Errors method, while R-software v4.1.3 was used to obtain multiple regression using the bootstrapping technique (using the “boot” package).
The findings revealed that RD had no significant influence on Earning Per Share (EPS) however, RMD had a significant negative influence on EPS. Furthermore, there is no significant interaction between RD and RMD; this suggests that whether RMD is low or high, RD does not
affect EPS (and vice versa: whether RD is low or high, RMD still has the same strength of effect on EPS). The Big 4 and sectors were the only control factors that had a substantial impact on EPS.
The findings of this research will assist practitioners in reevaluating the interactions between their
activities for RD and RMD on a firm's performance.
Keywords:
Risk Disclosure, Risk Management Disclosure, Firm Performance, Gulf Countries.
This study aims to investigate the moderating effect of Risk Management Disclosure (RMD) on the relationship between Risk Disclosure (RD) and firm performance to add to the growing body of literature on RMD by obtaining new evidence from a rapidly growing economic
environment in Gulf countries. This study covers eighty (80) non-financial Gulf Cooperation Council (GCC) firmsregistered on the GCC Stock Exchanges(SE) with various factors throughout a 10-year period beginning in 2012. Data was gathered from Thomson Reuters, annual reports, and individual firm financial statements. Pearson’s r (or Pearson’s correlation) was used to evaluate the linear relationship between each pair of the study variables, while multiple regression was used to investigate the moderating effect of RMD on the relationship between RD and firm performance, while controlling for Firm Size, Firm Age (FA), Board of Directors (BOD) Size, Big 4, and Sector (fractioned into 9 dummy variables, with the industrial sector being the reference category).
Pearson’s r (or Pearson’s correlation) was used to evaluate the linear relationship between each pair of the study variables, while multiple regression was used to see the effect of RD, RMD, and their interaction on EPS, while controlling for Big 4, FA, BOD, size, and sector. SPSS v26
software was used to obtain descriptive statistics and multiple linear regression using the HC03 Robust Standard Errors method, while R-software v4.1.3 was used to obtain multiple regression using the bootstrapping technique (using the “boot” package).
The findings revealed that RD had no significant influence on Earning Per Share (EPS) however, RMD had a significant negative influence on EPS. Furthermore, there is no significant interaction between RD and RMD; this suggests that whether RMD is low or high, RD does not
affect EPS (and vice versa: whether RD is low or high, RMD still has the same strength of effect on EPS). The Big 4 and sectors were the only control factors that had a substantial impact on EPS.
The findings of this research will assist practitioners in reevaluating the interactions between their
activities for RD and RMD on a firm's performance.
Keywords:
Risk Disclosure, Risk Management Disclosure, Firm Performance, Gulf Countries.
Thesis (Master)-University of Bahrain, College of Business administration, Department of Accounting, Sakhir, Bahrain, 2023.
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https://digitalrepository.uob.edu.bh/id/86f7b0bc-ae82-4efd-9f58-10aca202b015
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