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Strategic implications of voluntary disclosure and the application of the legitimacy theory


A broad and in-depth review of voluntary disclosure, as the consequential reflection of corporate governance, provides alternative explanations for some the research results discussed in the traditional literature. With regard to the implications of the information asymmetry and the agency theory on voluntary disclosure, we see that the correlation of such is not absolute. In this paper, our understanding in the subject matter is deepened, as we evaluate the various dimensions of corporate disclosure both from a theoretical and an empirical point of view. We discuss the strategic effects as well as the incentives behind corporate disclosure while mirroring the disclosure theory to the legitimacy theory in real life business settings. As we discuss the potential conflicts and drawbacks that researchers and practitioners may have encountered in their previous research, we have discovered that many fundamental research questions related to voluntary disclosure have, in fact, remain unanswered as a result of mixed interpretations. Finally, we propose directions for future research, and subsequently open new research arena to be tested by further research.


corporate disclosure, corporate governance, agency theory, information asymmetry



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