The Relationship Between Social Disclosure and Its Impact in Share Price with the Organization’s Nature: Firms Size, Firms Financial Performance, and Listed and Delisted Firms

Topics: Regression analysis, Annual report, Form 10-K Pages: 22 (6995 words) Published: April 23, 2012
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The relationship between social disclosure and its impact in share price with the organization’s nature: firms size, firms financial performance, and listed and delisted firms Moza AL-Aufi
Sophichaya Thaweeskulchai
Xueqi WANG

Contents
Executive Summary3
Introduction4
Background and theory development and hypotheses5
Literature review5
Regulatory background6
Theory development7
Hypotheses development7
Research design9
Sample selection9
Table 1: Research sample9
Models and Variables10
Results and discussion11
Table 2: Tested Ohlson model verse modifies Ohlson model11
Table 3: descriptive statistics for 25 high performing firms and 25 low performing firms.12
Table 4: descriptive statistics for 25 big firms and 25 small firms13
Table 5: the correlation between different variables for 25 high performing firms and 25 low performing firms15
Table 6: result of regression for high and low performing firms16
Table 7: result of regression for big and small companies16
Table 8: descriptive statistics for 38 listed companies and 12 delisted companies.18
Table9: result of regression for listed and delisted firms.19
Table10: Sensitivity Analysis20
Conclusions22
Limitations and further research23
Appendixes25
References list30

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Executive Summary
Since the 1990s several organisations have been reporting non-financial information on annual report, such as sustainability report, board-based business report, and environmental or social impact report. These reports developed to consider the social in relations on physical environment and its economic performance. There are different opinions on relationship between social responsibility and firm performance shown on previous study. This report reviews 50 companies 2009 annual report on Energy sector in Australia. The report will investigates and analyse these information via Ohlson model, modified Ohlson model and sensitivity test. The main methodology of the research is the comparison between listed and delisted companies, high-performance and low-performance companies and big and small firms through descriptive statistics and Regression analysis. The result has confirmed that listed companies, high-performing companies and big companies do have more social disclosure on their annual report. However, the social and environmental disclosure didn’t determine the company’s financial performance. Moreover, there is no significant relationship between share price and companies’ size nor its financial performance. Nonetheless, there’s also no significant relationship between share price and listed or delisted companies. The model shown in this research is moderate stabilise and not over sensitive to change in samples. That is, upon the removal of extreme samples, the research model does not have a significant impact on each variable. However, there is a restriction in this research. First, the research contains one year information at the specific industry. Second, the information in 2009 annual report were used, thus, it might lack on the relevancy regarding the current financial issue. This is due to the shortage of research’s samples, delisted companies group samples. -------------------------------------------------

Introduction
This paper examines the relationship between social disclosures on annual report and the company financial scale. Specifically, it analyses whether social disclosure affect a company’s size, performance and share price. Furthermore, it will examine on the correlation between social disclosure and these factors in Energy industry. In...

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