Global diversification and corporate disclosure

Steven F. Cahan, Asheq R. Rahman, Hector Perera

Research output: Contribution to journalArticlepeer-review


This paper examines whether a firm's level of voluntary disclosure varies with its level of global diversification. We argue that information asymmetries and agency costs arising from the global diversification of operations and financing increase the incentives for firms to disclose at a higher level. We measure global diversification of operations by factor-analyzing foreign shareholdings and foreign debt, and we measure global diversification of financing by factor-analyzing foreign sales and foreign subsidiaries. Using a sample of 216 firms from 17 countries selected from Fortune's Global 500 list and Botosan's (1997) disclosure index, we find that the level of voluntary disclosure is positively related to the extent of global operations, but is not related to the extent of global financing.
Original languageEnglish
Pages (from-to)73-93
Number of pages21
JournalJournal of International Accounting Research
Issue number1
Publication statusPublished - 2005
Externally publishedYes


  • globalization
  • global diversification
  • voluntary disclosures


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