Normative Framework for Risk Disclosure Index and Its Empirical Analysis

M. V. Shivaani (mvshivaani@gmail.com), P. K. Jain (pkjain.iitd@gmail.com) and Surendra S. Yadav (ssyadav@dms.iitd.ac.in)
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M. V. Shivaani: Indian Institute of Management (IIM), VNIT Campus
P. K. Jain: Indian Institute of Technology Delhi
Surendra S. Yadav: Indian Institute of Technology Delhi

Chapter Chapter 4 in Understanding Corporate Risk, 2019, pp 65-167 from Springer

Abstract: Abstract This chapter aims to provide a normative framework to measure the quality of risk disclosuresRisk disclosures in annual reportsAnnual reports . The index uses textual analysisTextual analysis to capture not only the quantity but also the quality of disclosures, based on three semantic attributes, namely, nature (qualitative/quantitative), tense (past/future/both) and tone of the disclosures. The index is based on 69 risk and risk-related items. The index has been empirically computed for the sample 429 non-financial companies for each of the 10 years from 2005 to 2015. In addition, an aggregative analysis, focussing on phase-wise, age-wise and industry-wise analysisIndustry-wise analysis has been carried out. Further, a dis-aggregative (variable-wise) detailed analysis has been carried out to gain deeper insights into ‘most/least’ frequently and ‘most/least’ comprehensively disclosed risk items.

Keywords: Risk disclosure; Content analysis; Textual analysis; Semantic analysis (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/978-981-13-8141-6_4

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