How far can mandatory requirements drive increased levels of disclosure?

IMPACT

This article reveals that compliance with mandatory disclosure requirements improves over time. However, simply publishing regulations is not sufficient to drive a substantive change in terms of transparency. This study has implications for regulators and professionals about legitimizing laws passed about accounting and reporting by public sector organizations.

ABSTRACT

This article fills an important gap in the field of mandatory disclosure research by examining whether, over time, Spanish SOEs have had higher levels of compliance with the mandatory disclosure requirements contained in the Spanish Law on Transparency and Good Governance. Drawing on institutional theory, and its relationship with resource dependency perspective, the authors conclude that the initial strategy adopted by Spanish SOEs was driven by the coercive pressure exerted by the government by introducing new transparency regulations. Meanwhile, the later strategic response might be associated with the combined influences of normative and mimetic pressures. The findings show that levels of disclosure improved significantly but that just passing a law is not sufficient to increase the level of transparency in organizations.

KEYWORDS:

• Institutional theory
• mandatory disclosure
• regulation
• state-owned enterprises (SOEs)
• transparency

Additional information

Funding

This article is a part of a research project funded by the FEDER operational programme Andalusia 2014-2020 (research project FEDER-UCA18-107740).