This thesis explores causal attribution statements on performance outcomes given
in annual reports of UK listed rms. The objectives are three-fold. First, it analyses
the nature and extent of attribution statements provided. Second, it explores
corporate governance factors and rm-speci c characteristics that are related to the
provision of attribution statements. Finally, it investigates the economic consequences
of providing attribution statements by examining their association with the rm's cost
of equity capital.
Using data drawn from a sample of 142 UK rms listed on the London Stock
Exchange, content analysis was used to measure the extent of attributions in the
annual reports for the year 2006. The results show that the volume of attribution
statement provision is generally low and variation across rms is low. Firms also show
a strong tendency to explain performance with internal rather than with external
reasons. The results from regression analysis show that the volume of attribution
statements and the space given to internal and external attribution statements is
associated with the proportion of non-executive directors, director share ownership,
audit committee size, market value, gearing, pro tability and new share issues.
With respect to the relationship between the attribution statements and the cost
of capital, the PEG model was employed to estimate the cost of equity capital. The
ndings indicate an association between attribution statement provision and the cost
of equity capital, but only for rms with low analyst following. For these rms,
more extensive performance explanations and more extensive internal explanations
are associated with a higher cost of equity capital. However, attribution statements
are unrelated to the cost of equity capital for rms with high analyst following.
The thesis makes two contributions in the area of attribution determinants. First,
it measures attribution provision with a measure that has not been previously applied
in the literature to measure attribution statements. Second, it provides evidence
on how rm-speci c characteristics and the rm's corporate governance mechanisms
in uence the extent and the type of performance explanations provided by rms.
The thesis makes four contributions regarding the e ect of attribution statements
on 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 the
association between attribution statements and the cost of equity capital is in uenced
by an interaction between attribution statements and analyst following. Third, the
thesis provides the rst evidence of the relationship between attribution statements
and the cost of equity capital in a UK setting. Fourth, it provides evidence that
the relationship between disclosure and the cost of equity capital is complex and is
in uenced by interactions between disclosure and information intermediaries.
| Identifer | oai:union.ndltd.org:BRADFORD/oai:bradscholars.brad.ac.uk:10454/5723 |
| Date | January 2012 |
| Creators | Meier, Florian |
| Contributors | Mangena, Musa |
| Publisher | University of Bradford, School of Management |
| Source Sets | Bradford Scholars |
| Language | English |
| Detected Language | English |
| Type | Thesis, doctoral, PhD |
| Rights | <a rel="license" href="http://creativecommons.org/licenses/by-nc-nd/3.0/"><img alt="Creative Commons License" style="border-width:0" src="http://i.creativecommons.org/l/by-nc-nd/3.0/88x31.png" /></a><br />The University of Bradford theses are licenced under a <a rel="license" href="http://creativecommons.org/licenses/by-nc-nd/3.0/">Creative Commons Licence</a>. |
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