ASSESSING THE RELATIONSHIP BETWEEN INFORMATION TRANSPARENCY THROUGH SOCIAL MEDIA DISCLOSURE AND FIRM VALUE

Abstract

Based on the signaling theory, managers disclose the firm's high performance to maintain their positions and receive rewards. On the other hand, users of financial information prefer the transparency of information rather than the quantity of disclosed information. Online financial disclosure as an output of advanced technology provides useful, timely and verifiable information for decision making. Nevertheless, the level of IFR by the Gulf Cooperation Council companies varies due to the lack of appropriate regulations. Therefore, this study investigates the association between online financial disclosure and performance in the Gulf Cooperation Council Countries. Extensive literature review was carried out and a checklist of 90 items (71 for content and 19 for presentation) was developed to measure the level of online financial disclosure for the companies that are listed in Gulf Cooperation Council bourses.  The findings show that the overall online financial disclosure in Gulf Cooperation Council is 77% Nevertheless; the results indicate a positive association between OFD and performance.  Accordingly, the study recommends that regulatory bodies should develop a guideline of disclosing information through the internet in order to enhance the corporate transparency and performance among the Gulf Cooperation Council listed companies leading to reasonable economic decision making.   Keywords: Online Financial Disclosure; Performance; Voluntary Disclosure; GCC Countries.