Disclosure quality, corporate citizenship and corporate image: evidence from Thai listed firms.

• Author: Ussahawanitchakit, Phapruke
• Position: Report - Survey

1. INTRODUCTION

   In recent years, corporate image has been an outcome of doing best business practices, activities, strategies, and operations in the turbulent markets and uncertain environments. Mainly, it is the overall impression made on the minds of the public about a firm (Nguyen and Leblanc, 2001). It is presented through business name, architecture, variety of products and services, tradition, and ideology. Also, corporate image is the customer's response to the total offering (Nguyen, 2006). It includes tangible attributes, and feelings and attitudes towards a firm. Thus, it has outstandingly enhanced firms' performance, competitive advantage, competitiveness, growth, survival, and sustainability. It is the result of an aggregate process by which the customers compare and contrast the various attributes of the firms. While corporate image is a consequence of firms that have attempted to do their businesses by emphasizing customer response, market reaction and stakeholder acceptance, several factors are implemented to drive, explain and determine the level of corporate image. Here, disclosure quality and corporate citizenship are proposed to play significant roles in encouraging firms' image, reputation, survival and sustainability. Consequently, the greater the disclosure quality and corporate citizenship are likely to provide the higher the corporate image in the competitive markets and environments.

   Disclosure quality is the presentation of firms' financial information and other related information through the process of providing information about items in the financial statements, including footnotes, supplementary schedules, or other means (Shaw, 2003). Besides, it explicitly provides the credibility and usefulness of financial information. Firms with greater disclosure quality tend to present the usefulness, benefit and advantage of financial information in order to enhance their corporate image. Likewise, corporate citizenship is the business leadership processes focusing on the company's impact on society and its relationships with stakeholders (Hoivik and Mele, 2009). Mainly, it is the strategies and operating practices that accompany develops in operationalizing its relationships with and impacts on stakeholders and the natural environments (Capriotti and Moreno, 2007). Firms with more corporate citizenship tend to commit to social cares and concern with stakeholder regulations in firms' doing businesses. Accordingly, both disclosure quality and corporate citizenship are hypothesized to become the valuable factors that potentially affect corporate image. Moreover, corporate citizenship is the hypothesized moderating effect of the relationships between disclosure quality and corporate image.

   In this study, the associations among disclosure quality, corporate citizenship and corporate image are clearly examined. Hence, this study aims at testing the impacts of disclosure quality and corporate citizenship on corporate image of listed firms in Thailand. Also, corporate citizenship is hypothesized to become the disclosure quality-corporate image relationships. Here, 114 Thai listed firms are the sample of the study. The key research questions are: (1) how disclosure quality has a significant effect on corporate image, (2) how corporate citizenship has an important influence on corporate image, (3) whether corporate citizenship moderates the disclosure quality-corporate image relationships, and (4) whether the aforementioned relationships are positive.

   This study is outlined as follows. The first section reviews existing significant literature in the areas and streams of disclosure quality, corporate citizenship and corporate image, links between the concepts of the aforementioned variables, and develops the key research hypotheses of those relationships. The second explicitly details research methods, including data collection, measurements, and statistics used. The third gives the results of the analysis and the corresponding discussion. The final summarizes the findings of the study, points out both theoretical and managerial contributions, and presents suggestions for further research as well as the limitations of the study.

2. THE INTERACTIONS AMONG DISCLOSURE QUALITY, CORPORATE CITIZENSHIP AND CORPORATE IMAGE

   In this conceptual model, disclosure quality, corporate citizenship and corporate image are the independent variables, moderating variable and dependent variable of the study respectively. All positive relationships are explicitly hypothesized. Thus, the conceptual, linkage, and research model presents the associations among disclosure quality, corporate citizenship and corporate image as shown in Figure 1 below.

   [FIGURE 1 OMITTED]

   2.1 Disclosure Quality

   Disclosure quality is a consequence of accounting's practices, functions, activities, methods, and procedures. Besides, it is defined as the presentation of firms' financial information and other related information through the process of providing information about items in the financial statements, including footnotes, supplementary schedules, or other means (Shaw, 2003). Essentially, it clearly interacts to influence the usefulness of financial information. Firms with greater disclosure quality tend to provide the usefulness, benefit and advantage of financial information in order to enhance their corporate image. Thus, disclosure quality has a significant positive impact on corporate image, corporate reputation, customer acceptance and stakeholder credibility. Accordingly, it is expected to reduce information asymmetry: altering the trading incentives of informed and uninformed investors so that there is relatively less...