Accounting information transparency and business performance: A case of G7 construction companies

  • Received October 18, 2022;
    Accepted December 6, 2022;
    Published December 22, 2022
  • Author(s)
  • DOI
    http://dx.doi.org/10.21511/ppm.20(4).2022.39
  • Article Info
    Volume 20 2022, Issue #4, pp. 518-531
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A high level of company bankruptcy in certain countries and a low level of profitability actualizes the need to find additional mechanisms for increasing the efficiency of their activities. One of such mechanisms is the growth of information transparency. The study deals with examining the effects of accounting information transparency on business performance on the example of construction companies in G7 countries. The transparency index was used as a parameter characterizing the level of accounting information transparency. The level of business performance was analyzed using the following indicators: value added of the construction industry, investment in the construction industry, number of construction firms, profitability of the construction industry, annual all-work construction output index, and total employees in construction firms. The dependence between the indicators was analyzed using the multiple regression analysis, Dickey-Fuller, Philips Perron, and Johansen tests. According to the results, the most vital link was between the level of accounting information transparency and the volume of investments (increased information transparency by 1 point leads to an increase in the volume of investments from 1.7% to 4.6%). At the same time, the level of accounting information transparency practically does not affect the number of employees (change by 0.1-0.2%) and added value (change by 0.1-0.3%). It was concluded that the policy of accounting information transparency should be an essential element of company strategy aimed to increase the level of its investment attractiveness and confidence of investors and consumers in its activities.

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    • Figure 1. Change in the value of a business with an increase in the level of its information transparency
    • Figure 2. Dynamics of changes in the transparency index and the value of the portfolio of the 100 most informationally transparent companies in the world
    • Table 1. Risks related to transparency
    • Table 2. Descriptive statistics for the period from 2010 to 2021
    • Table 3. Multiple regressions for accounting information transparency and business performance of construction firms in G7 countries
    • Table 4. The Dickey-Fuller and Philips Perron tests
    • Table 5. The first differences of the data series for stationarity by the Dickey-Fuller test
    • Table 6. Johansen tests for cointegration
    • Table 7. The maximum lag of the influence of accounting information transparency on business performance
    • Conceptualization
      Sevinj Abbasova, Mehriban Aliyeva
    • Formal Analysis
      Sevinj Abbasova, Mehriban Aliyeva
    • Funding acquisition
      Sevinj Abbasova, Leyla Huseynova
    • Investigation
      Sevinj Abbasova
    • Methodology
      Sevinj Abbasova, Mehriban Aliyeva, Leyla Huseynova
    • Software
      Sevinj Abbasova, Leyla Huseynova
    • Validation
      Sevinj Abbasova, Leyla Huseynova
    • Visualization
      Sevinj Abbasova, Leyla Huseynova
    • Writing – review & editing
      Sevinj Abbasova
    • Project administration
      Mehriban Aliyeva
    • Resources
      Mehriban Aliyeva
    • Supervision
      Mehriban Aliyeva
    • Writing – original draft
      Mehriban Aliyeva
    • Data curation
      Leyla Huseynova