The Effects and Determinants of Extensive Disclosure : Evidence from Japan

It is thought to be increasingly important for firms to be engaged in extensive disclosure in Japan, which subsumes information about firms' economic, social, and environmental aspects. Our research aims to investigate why firms voluntarily disclose such extensive information to various external stakeholders and to measure the effect of this extensive disclosure. We find that corporate attitudes toward extensive disclosure and corporate social performance (CSP) are positively correlated. We also show that corporate attitudes toward extensive disclosure and corporate reputation are positively correlated. This evidence indicates that firms are engaged in extensive disclosure as a component of their corporate strategic social responsibility activities and that those with more positive attitudes toward extensive disclosure appear to be able to develop and maintain better relationships with various stakeholders