Determinants and consequences of attribution statements on corporate financial performance outcomes in the annual report. An empirical analysis of UK listed firms.

摘要

This thesis explores causal attribution statements on performance outcomes givenudin annual reports of UK listed rms. The objectives are three-fold. First, it analysesudthe nature and extent of attribution statements provided. Second, it exploresudcorporate governance factors and rm-speci c characteristics that are related to theudprovision of attribution statements. Finally, it investigates the economic consequencesudof providing attribution statements by examining their association with the rm's costudof equity capital.udUsing data drawn from a sample of 142 UK rms listed on the London StockudExchange, content analysis was used to measure the extent of attributions in theudannual reports for the year 2006. The results show that the volume of attributionudstatement provision is generally low and variation across rms is low. Firms also showuda strong tendency to explain performance with internal rather than with externaludreasons. The results from regression analysis show that the volume of attributionudstatements and the space given to internal and external attribution statements isudassociated with the proportion of non-executive directors, director share ownership,udaudit committee size, market value, gearing, pro tability and new share issues.udWith respect to the relationship between the attribution statements and the costudof capital, the PEG model was employed to estimate the cost of equity capital. Theud ndings indicate an association between attribution statement provision and the costudof equity capital, but only for rms with low analyst following. For these rms,udmore extensive performance explanations and more extensive internal explanationsudare associated with a higher cost of equity capital. However, attribution statementsudare unrelated to the cost of equity capital for rms with high analyst following.udThe thesis makes two contributions in the area of attribution determinants. First,udit measures attribution provision with a measure that has not been previously appliedudin the literature to measure attribution statements. Second, it provides evidenceudon how rm-speci c characteristics and the rm's corporate governance mechanismsudin uence the extent and the type of performance explanations provided by rms.udThe thesis makes four contributions regarding the e ect of attribution statementsudon the cost of capital. First, it uses a quantitative approach to directly estimate the cost of capital e ects of attribution statements. Second, it provides evidence that theudassociation between attribution statements and the cost of equity capital is in uencedudby an interaction between attribution statements and analyst following. Third, theudthesis provides the rst evidence of the relationship between attribution statementsudand the cost of equity capital in a UK setting. Fourth, it provides evidence thatudthe relationship between disclosure and the cost of equity capital is complex and isudin uenced by interactions between disclosure and information intermediaries.