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In general, up to date there has been little academic research related specifically to banking sector disclosures. Earlier research has focused on non-financial companies’ annual disclosures and their association with company attributes. Very few empirical disclosure studies have sought to measure the extent of voluntary disclosure and its relationship with commercial bank-specific characteristics in particular. For this reason, this section, therefore, will review the previous empirical studies that measured the extent of voluntary disclosure (including social responsibility disclosure and aggregate disclosure), in order to identify a potential gap in the relevant academic literature and how this current study can be extended in an attempt to fill this gap.

The first empirical study that attempted to measure the extent of commercial banking disclosure was conducted by Kahl and Belkaoui (1981). They measured the overall extent of disclosure adequacy by 70 commercial banks selected from 18 countries located in the non-communist world (US 16, Sweden 3, Holland 1, Finland 1, Norway 1, UK 11, Germany 3, Singapore 1, Denmark 2, Australia 2, France 2, Switzerland 3, Austria 1, Italy 1, Canada 10, Japan 10, Spain 1 and Brazil 1). The main criterion for selection of the commercial banks sample was the provision of English language version annual reports available for the year 1975.

The commercial banking disclosure level was measured through a weighted disclosure index, consisting of 30 items of information by asking fifteen business administration professors of the Faculty of Administration of the University of Ottawa, knowledgeable in international financial reporting practices, to score the relative importance of disclosing each item in a disclosure index on a scale of zero to four, with higher scores indicating greater importance.

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Disclosure index information items were selected based on investment, financial and accounting literature, and the researcher’s perceptions of information items that had relevance for the ban stoc investors’ decision-making. Kahl and Belkaoui thought that their sample of professors might not be an adequate proxy for users of bank annual reports internationally, so they sent the same questionnaire to 50 of bank financial analysts holding the professional designation Certified Financial Accountants who were listed in the 1975 Directory of the Financial Analysts Federation.

The number of responses to the mail survey was ten and their scoring of items was identical to that of the early respondents (professors) with some slight but not statistically significant difference in the weights. Then the annual reports of the 70 banks were evaluated on the basis of the response score assigned to each of the information items in the disclosure index. The researchers also measured the degree of association between the extent of disclosure and the commercial bank size (measured by total assets).

Using the Spearman’s ran correlation test, they found a positive correlation between the size of commercial bank and the extent of disclosure. Additionally, their results revealed that the level of information disclosure in the annual reports of commercial banks differs from country to country.

Abdul Hamid (2004) investigates empirically the association between a number of corporate characteristics and the level of social information disclosed by 48 banks and finance companies in Malaysia. The corporate characteristics examined were: firm size, financial performance (was measured by return on equity (ROE) and return on assets (ROA)), age of business, listing status, and company profile. A sample of annual reports for the year 1999, were drawn from the three sites in Malaysia, namely Malaysia Central Bank, Banking Institute of Malaysia, and Kuala Lumpur Stock Exchange.

The total of disclosure index was measured by pages to the nearest of hundredth of a page. To assess the effect of each independent variable on the level of disclosure, he used multiple regression models. The results of the study showed that the level of social information disclosure was significant and positive association with firm size, listing status and age of business. In addition, the study shows that insignificant relationship

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between profitability variables and the disclosures of social information. Finally, for the company profiles the results showed an insignificant and negative association.

Hooi (2007) empirically investigated the impact of national culture on the extent of information disclosure in the 2004 annual reports of 37 listed domestic commercial banks. The commercial banks sample was selected from 17 developed and developing countries. The selection of countries was determined by the data availability of the five culture values, namely individualism, masculinity, power distance, uncertainty avoidance, and long-term orientation.

In order to measure the extent of information disclosure in the annual reports of commercial banks, he used the 2001 Basel survey checklist, containing 104 voluntary and mandatory items. The 104 information items were categorized into twelve types of information namely, capital structure (14), capital adequacy (7), market risk internal modeling (16), internal and external ratings (4), credit risk modeling (5), security activities (8), asset quality (13), credit derivatives and other credit enhancements (6), derivatives (other than credit derivatives) (9), geographic and business line diversification (10), accounting and presentation policies (7), and other risks (5).

Using multiple regression analysis, Hooi (2007) found that the only significant cultural dimension for commercial banking disclosure was uncertainty avoidance. He also found that the banking disclosure level across all countries was a moderate 48%. In addition, this study recommended that long-term orientation value should not be used as part of the cultural framework for disclosures due to biased data. Finally, the researcher concluded that the used of disclosure rate tends to yield slightly better results in terms of explanatory power compared to disclosure band.

Much more recently, Hossain and Taylor (2007) investigated empirically the relationship between a number of commercial bank attributes and the extent of voluntary disclosure in the annual reports of 20 domestic private banks in Bangladesh. The commercialbank attributes examined were: commercial bank size (log of assets), audit firm link, and profitability.

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To select of the voluntary items of information included in the disclosure index, the researchers considered the research that used the disclosure indices as a methodology, disclosure for financial institutions as required the IAS-30, and the items of information having considered potential interest to the user groups (shareholders, financial analysts, government authorities, and professional accountants). A total of 45 voluntary disclosure items were identified as relevant and could be expected to disclose voluntarily in the annual reports of the banking companies in Bangladesh.

The un-weighted disclosure method was employed in order to measure the voluntary disclosure score for each bank, in which an item scores one if disclosed and zero if not disclosed. A multiple regression model was applied to investigate the relationship between the extent of voluntary disclosure (dependent variable) and bank attributes (independent variable). The multiple regression model was significant (P<0.005). The adjusted coefficient of determination (R squared) indicated that 24% of the variation in the dependent variable was explained by variations in the independents variables. The study findings also revealed that bank size and audit firm link to be significant in determining the disclosure levels of the banks (at a 5% level).

In contrast, no statistically significant relationship was found between the extent of voluntary disclosure and the profitability variable. Findings of this study suggested that the extent of voluntary disclosure by banking companies in Bangladesh systematically differ depending upon the bank size and characteristics of its audit market (whether it is audited by Big Five audit firms or not).

In another contemporary study, Hossain and Reaz (2007) investigated empirically the extent of voluntary disclosure by 38 listed banking companies in India, also examining the association between six bank-specific characteristics and the extent of voluntary disclosure of the sample companies. The bank characteristics investigated were: bank size (measured by log of assets), age, multiple listing, complexity of business, board composition and assets-in-place. A disclosure index was constructed consisting of 65 items of voluntary information.

A disclosure index for each bank was calculated using a dichotomous approach (un- weighted), in which an item scores one if disclosed and zero if not disclosed. The Ordinary Least Square (OLS) regression model was used to assess the effect of each

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bank characteristics on the extent of voluntary disclosure. Their results indicated that Indian banks were disclosing a considerable amount of voluntary information.

Additionally, it was shown that bank size and assets-in-place are statistically significant in explaining the level of disclosure. However, the bank age, diversification, board composition, multiple exchange listing and complexity of business were found to be insignificant in explaining the extent of voluntary disclosure in annual reports. Hossain and Reaz found that 55% was the highest disclosure score and 20% was the lowest. Moreover, the study found that Indian banks published 35% of voluntary items of information on average.

It was found also that public sector banks disclosed more voluntary information (38.66%) than private sector banks (31.15%).The researchers concluded that this study was quite interesting and different from other studies because it was focused on banking institutions, also there has been little research in the banking institutions on voluntary disclosure and also the developing country perspective. However, this study was limited to single fiscal year and single country.

In a recent study of banking disclosure, Hossain (2008) conducted an empirical study to investigate the extent of mandatory and voluntary information disclosed in the annual reports of 38 listed banking companies in India. He also examined the association between the extent of disclosure and company-specific attributes; namely, age, bank size, profitability, complexity of business, assets-in place, board composition, and market discipline with the level of disclosure.

Disclosure indexes used by Hossain show a total of 184 items of information containing 101 mandatory items and 83 voluntary items that might be disclosed in an annual report. The selection of mandatory items was based on the following criteria: (1) banking companies act, 1949 (2) company act, 1956, (3) listing rules-clause 49, (4) company act, 1956 and (5) RBI guidelines. The selection of voluntary items was based on previous disclosure studies and BASEL.

The un-weighted disclosure index methodology was used in the study, an item of information scoring one if disclosed, and zero if not disclosed. The Ordinary Least Square (OLS) regression model was employed to assess the effect each banking

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company attributes on the level of disclosure. Hossain (2008) found a significant positive relationship between the aggregate disclosure levels and bank size, profitability, board composition, and market discipline. The results also showed that bank age, assets-in-place, and complexity of business were negatively associated with the extent of total disclosure. Overall, on average, India banks published 60% of the total disclosure of which 88% were mandatory and 25% were voluntary items.

This study can be criticised on several points. First, it was limited to a single year period. Secondly, the researcher did not include the unlisted banking companies in their sample population. It would have been more meaningful if the research had included unlisted banking companies in order to determine whether there is a significant difference between disclosure in the annual reports of listed banks and disclosure in the annual reports of unlisted banks.

In another study, Maingot and Zeghal (2008) investigated the corporate governance disclosure practices of 8 Canadian banks. The sample of banks was selected based on the following three criteria: (1) the bank is a widely held bank with no single shareholders can own more than 10% of the total of the bank, (2) the bank is traded on a stock market, and (3) the bank must be chartered in Canada. A coding sheet containing 54 elements of disclosure, was developed to evaluate the corporate governance disclosure of in the 2003 annual reports of Canadian banks. Selecting the elements of disclosure were based the previous literature and Toronto Stock Exchange Corporate Governance Guidelines. The coding mechanism was used, if the bank discloses the element a score one will be given, if the bank not disclose the element a score zero is given.

The researchers also examined the effect of the bank size (measured by total assets) on the disclosure of corporate governance information. The results of the study showed that the large banks disclose more information on the governance section of their web pages. The findings also indicated that the smaller banks disclose a large amount of their information in both the annual reports and in the proxy circulars. Matingot and Zeghal (2008) found that the size of the bank has a positive impact on the volume of disclosure information related to corporate governance.

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In Kenya, Barako and Brown (2008) examine empirically the influence of three corporate governance attributes on the level of social information disclosed in 40 Kenyan banks annual report. The corporate governance variables examined in this study were: board composition (independence of board), gender representation on board, and foreign nationals on board. To measure the extent of voluntary disclosure, a disclosure index comprising 22 social disclosure items was developed. The list of the disclosure items were drawn from prior corporate social disclosure studies. The un-weighted disclosure scoring approach was applied, with a score of one if an item is disclosed and zero if not.

Multiple regression analysis was used to examine the relationship between the level of disclosure of social information (dependent variable) and the three corporate governance variables. The results of the regression analysis indicated that the board composition variable was significantly associated with the extent of social information disclosed annual reports of banks. In addition, the results also showed that the board gender diversity variable was statistically significant. However, the proportion of foreign national on the board of banks was found not significantly associated with the level of voluntary disclosure.

Overall, the level of disclosure of social information disclosed by Kenyan banks was very low with a mean of 15%. In particular, banks did not disclose important information relating to recruitments, employment of special groups, assistance to retiring employees, employees productivity and turnover. In addition, very few banks, 12.50% and 0.03% respectively disclose information relating to environment policy and environmental activities they undertake, while only three banks contribute to the national AIDS campaign.

In a Libyan context study, Kribat (2009) conducted an empirical study to measure the degree of mandatory and the overall information disclosures made by Libyan banks during the period from 2000 to 2006. The analysis proceeds to examine the relationship between four bank-specific characteristics (i.e. bank size, age of bank, profitability and ownership structure) and the extent of aggregate information disclosure. To measure the disclosures levels, this study develop a checklist included 126 information items that

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measures both mandatory and voluntary disclosures in the annual reports of a sample of 11 private and government owned banks.

In this study, banks established after 2000 only were measured, and the annual reports for the shorter time periods were collected. Only 8 banks out of 11 banks collected their annual reports for seven years, some banks only had one annual financial report collected over the period of seven years studied (i.e. Aman Bank for Commerce and Investment and Alejmaa Alarabi Bank). Further, the researcher included the Commercial Arab Bank, in fact this bank was licensed as a commercial bank in 2007 as stated in the CBL, Annual Reports of 2007, on page No. 72.

Kribat (2009) claimed that the mandatory disclosure checklist was constructed based on relevant Libyan laws, namely Commercial Law, Income Tax Law and Banking Law. There was no information given about these mentioned laws-either the year or the issue number, and the researcher did not specify information items resources such as number of Articles and the total of required items stated by each Law. Surprisingly, Kribat, (2009, p. 26) has stated that “Libyan companies are not required by the Libyan Commercial Law to provide the information included in the annual reports to the public”.

This clearly implies that there is no mandatory disclosure requirement at all. Surprisingly, later he concluded that Libyan banks failed to comply fully with mandatory disclosure requirements in any of the sample years (2000-2006). In fact, no information items were queried by stated laws to be published to external stakeholders and the items in the Libyan’s annual reports were disclosed voluntarily. In particular, there is no Libyan banking law that specified any list of information items must be disclosed in the Libyan ban s’ financial annual reports, the sole Libyan ban ing law which imposed on the all banks to publish their financial statements to general public was the Banking Law No 1 which was issued in 2005 (Article 84), however no specific information items were required by this Law to be disclosed.

Kribat (2009) used a multivariate panel regression analysis to test the association between the overall information disclosure and the ban s’ attributes. The results of the study revealed that that both profit and age appear to have a positive influence on the

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overall financial disclosure level while size of the bank has a negative influence. The similar variables were also tested by the researchers to investigate their influence on the extent of banking disclosure level, and they found that the size of the bank has a positive impact on the extent of disclosure (e.g. Kahl and Belkaoui, 1981; Hossain and Reaz, 2007; Hossain and Taylor, 2007; Matingot and Zeghal, 2008; Hossain, 2008). While, age of the bank was found by similar studies is insignificant in explaining the level of disclosure (e.g. Hossain and Taylor, 2007; Hossain and Reaz, 2007; Hossain, 2008). Finally, the reliability of the Kribat (2009) empirical results is questionable, since there was no disclosure requirement imposed in the Libyan’s commercial ban at that time of the study. Also, the sample is not homogeneous in relation to the number of annual reports obtained from each bank.

Another empirical study by Menassa (2010) attempted to investigate the extent of social disclosures by 24 Lebanese commercial banks and examined the relationship between a number of bank characteristics, namely, bank size, financial performance, listing status, and overseas presence and the extent of social disclosure. This study employed the sentence count as the main unit of analysis to locate and analyse the type and quantity of social disclosure provided in the annual reports for the year 2006. The findings provide evidence of the widespread use of this phenomenon by these banks as a means to communicate with their stakeholders.

Moreover, the study results revealed that banks attribute a greater importance to human resource and product and customers disclosures, whereas the availability and extent of environmental disclosure was still weak. In addition, a strong association was found between the extent of social disclosures and bank size and financial performance variables. In contrast, found no significant statistical relation with the bank age. Finally, findings of this study suggested no difference in social disclosure behaviour between listed banks and banks with an overseas presence, and non-listed banks and those operating only in Lebanon.

More recently, Agyei-Mensah (2012) conducted an empirical study to investigate the influence of firm-specific characteristics (i.e. bank size, profitability, debt equity ratio, liquidity and audit firm size) on the extent of voluntary disclosure in annual reports for the year 2009, of 21 rural banks in the Ashanti region of Ghana. To assess the level of

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