Corporate governance disclosures and international competitiveness: A study of Indian firms

Past research on financial disclosures indicates the existence of proprietary costs that discourage companies from disseminating full information in the presence of competition in domestic markets. However, the relationship may not hold in international competition regarding corporate governance disclosures. Firms must disclose information about their corporate governance practices to win the confidence of buyers and this may actually improve competitiveness. In this article, we study the relationship between corporate voluntary disclosures and competitiveness of Indian firms in the international product market, using Multiple Regression Models. The regression analysis indicates mixed results: firms gain competitiveness in international markets when they voluntarily disclose more about their board practices, but ownership-related disclosures reduce market share. The size of the firm, industry concentration ratio and firm growth rate are included in the regression equations as control variables, and their relationship with competitive measures was found to be in line with a priori expectations.