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Non-financial disclosure and market-based firm performance: The initiation of financial inclusion

Sudipta Bose, Amitav Saha, Habib Zaman Khan and Shajul Islam

Journal of Contemporary Accounting and Economics, 2017, vol. 13, issue 3, 263-281

Abstract: We examine the association between financial inclusion disclosure and firm performance in Bangladeshi banks from 2009 to 2014 in response to a regulatory directive on the engagement of banking firms in financial inclusion activities. We find a positive association between financial inclusion disclosure and banking firms’ subsequent performance, with this relationship moderated by market competition and government ownership. We also find evidence that firms’ engagement in financial inclusion activities increases their market share, with the disclosure of this information reducing the information asymmetry between managers and capital market participants. The broad implication of our research findings is that firms considering investing in financial inclusion activities could benefit from improved firm performance and gain market share. The research findings contribute to the larger debate on the reasons why firms should consider incorporating these initiatives into their operational activities. In addition, the findings inform various international organisations that promote financial inclusion activities.

Keywords: Financial inclusion disclosure; Banking industry; Firm performance; Emerging economy; Stakeholder theory (search for similar items in EconPapers)
JEL-codes: G21 M14 M41 M48 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jocaae:v:13:y:2017:i:3:p:263-281

DOI: 10.1016/j.jcae.2017.09.006

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Journal of Contemporary Accounting and Economics is currently edited by Agnes C.S. Cheng, P. Clarkson, F.A. Gul, Zoltan Matolcsy, Dan Simunic and Ben Srinidhi

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