How cultural dimensions are shaping social expectations: the case of European state-owned enterprises' nonfinancial reporting

Gianluca Zanellato and Adriana Tiron-Tudor
Authors registered in the RePEc Author Service: Adriana Tiron Tudor

Journal of Applied Accounting Research, 2021, vol. 23, issue 1, 99-121

Abstract: Purpose - The purpose of the research is to shed light on how the mandatory regulation on nonfinancial information has changed European state-owned enterprises' (SOEs) disclosure levels. In addition, the present research aims to demonstrate, under the lens of legitimacy theory, how Hofstede's cultural dimensions shape social expectations that may have suffered changes after the introduction of a mandatory regulation on nonfinancial reporting. Design/methodology/approach - The paper adopts a mixed approach. First, it employees the content analysis to investigate the disclosure level on 22 of the 24 European SOEs. Second, the authors demonstrate how cultural dimensions take a different role when a change in regulation is introduced using the qualitative comparative analysis (QCA). Findings - The results reveal a slight increase in disclosure from the year before introducing the directive. Additionally, the results demonstrate how none of Hofstede's cultural dimensions is responsible for high disclosure levels. Although, the sufficiency analysis outlines several combinations of different cultural dimensions that lead to high disclosure levels. In particular, results demonstrate how the core dimensions leading to the outcome changed once the European Union Directive (EUD) has entered into force. Research limitations/implications - Despite the contributions, the present study is not free of limitations. As the investigated sample is limited to a small number of SOEs, the content analysis adopts a dichotomous approach. The analysis is conducted on integrated reporting, and the fuzzy set QCA results cannot be used for generalization but refer only to the investigated sample. Consequently, further studies should investigate a broader sample of SOEs and organizations that adopt other nonfinancial reporting frameworks. Additionally, a qualitative approach to the reports' analysis is recommended. Practical implications - It demonstrates how the EUD on nonfinancial information has impacted the disclosure levels of European SOEs. It adopts a fresh methodology rarely used in accounting. It demonstrates how cultural conditions influence social expectations that determine corporations to disclose more information after the introduction of a regulatory framework. Originality/value - The paper's theoretical contribution refers to its focus on the public sector, and it adopts a methodology rarely used by accounting scholars.

Keywords: Nonfinancial reporting; EUD 2014/95; State-owned enterprise; Qualitative comparative analysis (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jaarpp:jaar-04-2021-0116

DOI: 10.1108/JAAR-04-2021-0116

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