Page 154 - 臺大管理論叢第32卷第1期

The Determinants of Voluntary Disclosure of Unaudited Earnings by Listed Company on Market Observation
Post System

which include new capital funding (NCO), size of the company (SIZE), the correlation
between accounting earnings and stock return (COR), buy-and-hold abnormal return
(BHAR), operating performance (PROFIT), debt ratio (DEBT), management shareholding
(MGT), family business (FAMILY), institutional shareholding (INSTI), size of the Board of

Directors (BOARD), and ratio of independent directors (INDBOARD).
This study applies the Logit/Probit Model to analyze the determinants associated
with public listed companies that voluntarily disclosed unaudited earnings on the MOPS

between 2009 and 2017. According to the information filing rules, publicly listed
companies may choose to file on a monthly or quarterly basis. Thus, this study further
divides the disclosure of unaudited earnings into three different categories, namely
“Monthly,” “Quarterly,” and “Not-disclosed.” We accordingly analyze the various motives
of management’s disclosure decisions by applying the Order Logit/Order Probit Model to

obtain more comprehensive understandings about their decisions.

3. Findings

First, this study shows that companies in need of raising funds, and/or those of larger
scales are more likely to voluntarily disclose the unaudited earnings and have higher
disclosure frequency. The result is in line with the Capital Market Transaction Hypothesis.
Second, this study indicates that companies with lower buy-and-hold abnormal return and

better operating performance are more likely to voluntarily disclose the unaudited earnings
and have higher disclosure frequency. The result is in line with the Signaling Hypothesis.
Third, this study also reveals that non-family controlled companies, companies with
larger board size, and those with lower ratio of independent directors are more likely

to voluntarily disclose the unaudited earnings and have higher disclosure frequency to
decrease agency cost between managers and outside shareholders. The result is in line with
the Mitigating Agency Hypothesis.

4. Research Limitations/Implications

Based on past relevant theories and literature, this exploratory study builds
hypotheses and confirms certain economic incentives that influence the management’s

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