The impact of firm ownership structure on voluntary disclosure: Empirical evidence from Czech annual reports

We investigate the impact of ownership structure on the extent of voluntary financial disclosure by examining the cross-sectional variation in the extent of disclosure by newly privatized Czech firms. Owners derive benefits directly from the firm (private benefits of control) and from changes in share values in the capital market. Both these benefits are affected by disclosure. Consistent with owners' attempts to maximize their total benefits, we find that the extent of disclosure is positively related to investment fund ownership at low levels of fund ownership but is negatively related to investment fund ownership at high levels of fund ownership.