Ownership structure and political spending disclosure

Ali, Hesham, Adegbite, Emmanuel, and Nguyen, Tam Huy (2022) Ownership structure and political spending disclosure. Accounting Forum. (In Press)

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Abstract

This study examines the link between ownership structure and political spending disclosure (PSD). We break down ownership into four different groups of shareholders: institutional, insider, governmental and foreign. Using a unique dataset provided by CPA-Zicklin for PSD and a panel dataset from S&P 500 companies between 2015 and 2018, our results reveal that institutional and governmental ownership are positively associated with the level of PSD, while insider ownership is negatively associated with the level of PSD. Additionally, while prior literature mainly investigated how ownership structure influences disclosure practices, we analyse the mechanisms through which ownership characteristics influence PSD. Our cross-sectional tests provide evidence that insider owners exhibit more PSD if they are pursing tax-related lobbying expenses and tax avoidance practices. Additionally, governmental owners demand lower PSD in firms with higher nonfinancial and financial reporting quality. Finally, institutional owners demand more PSD in the case of lower industry concentration. Overall, we conclude that different owners have distinct impacts and preferences on a firm’s political strategy and various mechanisms uniquely operationalize the interactions between different owners and political transparency. Through agency theory, our results advance heated debates on PSD – an emerging, yet hitherto less examined, category of voluntary disclosure.

Item ID: 68017
Item Type: Article (Research - C1)
ISSN: 1467-6303
Copyright Information: © 2021 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis GroupThis is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives License(http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-commercial re-use, distribution, and reproduction in anymedium, provided the original work is properly cited, and is not altered, transformed, or built upon in any way.
Date Deposited: 06 Oct 2021 03:48
FoR Codes: 35 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 3501 Accounting, auditing and accountability > 350101 Accounting theory and standards @ 100%
SEO Codes: 23 LAW, POLITICS AND COMMUNITY SERVICES > 2302 Government and politics > 230203 Political systems @ 100%
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