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Ownership structure and political spending disclosure

Ali, Hesham; Adegbite, Emmanuel; Nguyen, Tam Huy

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Authors

Hesham Ali

EMMANUEL ADEGBITE EMMANUEL.ADEGBITE@NOTTINGHAM.AC.UK
Professor in Accounting and Corporate Governance

Tam Huy Nguyen



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 operationalise 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.

Citation

Ali, H., Adegbite, E., & Nguyen, T. H. (2022). Ownership structure and political spending disclosure. Accounting Forum, 46(2), 160-190. https://doi.org/10.1080/01559982.2021.1929006

Journal Article Type Article
Acceptance Date May 7, 2021
Online Publication Date Aug 8, 2021
Publication Date 2022
Deposit Date May 10, 2021
Publicly Available Date Mar 28, 2024
Journal Accounting Forum
Print ISSN 0155-9982
Electronic ISSN 1467-6303
Publisher Informa UK Limited
Peer Reviewed Peer Reviewed
Volume 46
Issue 2
Pages 160-190
DOI https://doi.org/10.1080/01559982.2021.1929006
Keywords Finance; Accounting
Public URL https://nottingham-repository.worktribe.com/output/5522658
Publisher URL https://www.tandfonline.com/doi/full/10.1080/01559982.2021.1929006?src=
Additional Information Peer Review Statement: The publishing and review policy for this title is described in its Aims & Scope.; Aim & Scope: http://www.tandfonline.com/action/journalInformation?show=aimsScope&journalCode=racc20; Received: 2020-05-12; Accepted: 2021-05-07; Published: 2021-08-08

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