The Impact of Firm Characteristics on The Practice of “Material Facts” Disclosure by Jordanian Companies
This research aims at attracting the attention to the corporate factors associated with the level of emerging “Material Facts” type of disclosure imposed by the Jordanian securities commission (JSC) in 2010, as a mean of enhancing firm transparency. An emerging material fact is defined as “any event or piece of information may affect the decision of a person to buy a security, continue to hold it or sell it or use it in another way”. The sample of the study consists of (34) industrial firms and (15) banks listed on Amman Stock Exchange (ASE) for the period (2015-2019). The study data were collected from the ASE website, with each emerging material fact disclosure classified under the categories of material fact index (shown in Appendix 1). The data was analyzed by regression, using the Statistical Package for the Social Sciences. The effects of four corporate characteristics on emerging material facts disclosure (FMFD) are examined: Firm size, firm profitability, firm leverage, and firm ownership concentration, in addition to some control variables.
The results showed a significant positive effect of the company’s size, leverage, ownership concentration, board directors’ independence, audit committee activity, and auditor type on the (FMFD), and no effect of profitability. The main recommendation is to increase research related to material facts disclosure of companies and its determinants in developing countries, such as Jordan, where there are no adequate studies on the subject found. Additionally Conducting future studies to expand the sample, by including more sectors, using longer period, and employing other sources of data beside the ASE website, such as holding interviews with stakeholders, and viewing newspaper reports to understand better corporate behavior toward this type of disclosure and increase the reliability of the study results.
Keywords: Firm Emerging Material Facts Disclosure (FMFD), Firm size, Profitability, Leverage, Ownership concentration, and ASE.
