Investor Perception and Corporate Disclosure: Quantitative Evidence from Indian Listed Firms

Abstract

The quality of the corporate disclosure constitutes one of the key aspects in the building of investor confidence and maximizing on transparency in the capital markets. In this paper, the authors discuss the relationship between the quality of the corporate disclosure and the investor perception within the context of setting the Indian listing companies. Taking into consideration the disclosure activities in the context of financial reporting, regulatory reporting and sustainability reporting, and voluntary information, disclosure in the study outlines the use of quantitative data to identify their effectiveness in encouraging investors to trust and make decisions. The analytical research utilizing the statistical tools of the correlation and regression analysis uses secondary data collected in the form of annual reports, corporate filed and Stock market databases and a sample of the firms graded in the Bombay Stock Exchange and National Stock Exchange to justify the strength and meaningfulness of the correlation between disclosure quality and investor confidence. The quality levels of the disclosures according to the findings correlate to each other in a positive and statistically significant manner, this means that, the higher the level of the quality of the disclosures, investor trust increases as well as reducing information asymmetry and making informed investment decisions. The disclosure quality difference also depends on the industry, which is also determined by the analysis and the governance mechanism impacts the disclosure. This is because strong corporate disclosure systems play major roles to stimulate investor confidence and market stability within the emerging markets like India, as indicated in the findings. The policy implications are addressed in such a way that they will guide the regulators, corporate managers and investors in the way of enhanced practices in disclosure as well as cranking up the capital market efficiency.