By
Pak-Lok Poon and Yuen Tak Yu
Internet corporate reporting has rapidly
increased since the last decade to provide newest company information to global
customers and investors. This information can be financial or non-financial
such as company overview, history, products and services, etc. Hong Kong is a one
of the biggest financial centers in the Asia-Pacific region. As many companies
went public, the demand for their financial information roars up. Since
financial information plays a very important role in investor’s decisions, Internet
financial reporting is an economical and fast way to reach potential investors.
Under high pressure of dynamic and
competitive business environment, firms see Internet corporate reporting no
longer an option, but rather a necessary way that any firm needs to implement. The
purpose of this article is to illustrate the relationships between the degree
of reported information on corporate websites and the characteristics of Hong
Kong's listed firms. This is measured in
terms of the richness of the corporate information disclosed on their websites
which reflects firm's commitment, resources and level of strategic significance
attached to Internet corporate reporting.
This empirical study test the theories
of innovation theory, the expectation-confirmation theory, corporate governance
theories, and the learning/experience curve theories. This research can imply on
many contexts related to the adoption of Internet corporate reporting. The authors
implemented an empirical study by using the questions, measuring the variables
in formulating hypotheses under the local context, and collecting lots of data during
three years. The data set composed of the top 200 listed firms which
collectively make up over 80% value of the total capitalization of the stocks
in Hong Kong.
The authors found that the degree of a
firm using Internet reporting has a positive relationship with some of its
characteristics, such as the level of corporate governance and previous
experience of adopting such a reporting practice. Furthermore, other factors
including firm's size, revenue and stock trading activity also play an
important role. Interestingly, it is found that system openness does not affect
the degree a firm adopts Internet reporting.
The study has some implication in
providing a clearer picture of Internet corporate reporting in Hong Kong.
Larger firms with higher revenues and stock trading activities are typically
more innovative, have more financial resources and greater access to technical
knowledge and expertise to adopt Internet corporate reporting. But as the
popularity of Internet corporate reporting grew, the size, revenue and stock
trading activity of a firm were no longer key indicators of adopting such a
reporting practice. Manager can utilize that knowledge to transform company
website as an effective and cheap community tool with consumers and investors
by providing useful information. This can help to build a strong understanding
and relationship with more customers, especially when firms enter new market
and consumers are lack of their products and company information.
References
Poon, P-L. & Yu, Y.T. (2012).
Internet corporate by listed firms in Hong Kong. Information Research, 17(1)
paper 510. [Available at http://InformationR.net/ir/17-1/paper510.html]
It makes sense that the larger corporations would lead the way into internet reporting. I do find it interesting that the level of a firms' corporate transparency is not conected to the committment to internet reporting. It seems to me they would go hand in hand.
ReplyDeleteIt seems in Hong Kong, before 2004 bigger firms have more information online. But nowadays, a lot of corporation information is collected from the internet. We can download annual reports or other information of a firm from its website easily. I think collecting information and considering which one is useful, is vital for investors.
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