Determinants of voluntary disclosure of segment information: A re-examination of the role of diversification strategy

Michael Aitken*, Cameron Hooper, Joanne Pickering

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

31 Citations (Scopus)

Abstract

This paper explores the determinants of management's decision to voluntarily disclose segment information. It is an extension of McKinnon and Dalimunthe (1993) who investigate the role of six hypothesised determinants. Their results indicate that firm size, industry membership, ownership diffusion, and the level of minority interest are related to the voluntary disclosure of segment information. However, they find that leverage and diversification into related versus unrelated industries are not related to this disclosure. It is the diversification finding that motivates our work. This paper explores the effect of differences in data, differences in samples, and differences in the measurement of diversification on the McKinnon and Dalimunthe (1993) results. Using an alternative definition of diversification, we find diversification strategy, firm size, and the level of minority interest to be related to segment disclosure while the results for ownership diffusion and industry are mixed. We find no support for a leverage effect.

Original languageEnglish
Pages (from-to)89-109
Number of pages21
JournalAccounting and Finance
Volume37
Issue number1
DOIs
Publication statusPublished - May 1997
Externally publishedYes

Keywords

  • Diversification
  • Segment reporting
  • Voluntary disclosure

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