The Impact of Financial Risk Disclosures on Corporate Value: Evidence for Portugal
The Impact of Financial Risk Disclosures on Corporate Value: Evidence for Portugal

Author(s): Vanda Roque, Katia Lemos, Helena Barbosa
Subject(s): Social Sciences
Published by: Udruženje ekonomista i menadžera Balkana
Keywords: Financial risk disclosure; Corporate value; Market risk
Summary/Abstract: The purpose of this paper is to investigate the impact of financial risk disclosures on corporate value. Based on content analysis of 2021 annual reports of 29 nonfinancial companies listed on Euronext Lisbon, the authors construct a global disclosure index that captures financial risk disclosures, as well as 3 sub-indices to capture credit, liquidity and market risks disclosures. Using multiple linear regression models, the authors investigate the impact of financial risk disclosures on corporate value, as measured by Tobin’s Q. The results show that financial risk disclosures are still parsimonious, with corporations disclosing mainly qualitative information. The results also show a negative and statistically significant impact of market risk disclosures on corporate value. When we consider credit risk and liquidity risk disclosures, as well as the global disclosure index, the impact is not statistically significant.

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