Variables definition
| Dependent variables | |
| TRNSP1 | = −1 × [0.4 × (number of words / number of sentences + 100 × (number of words with more than two syllables / number of words))] |
| TRNSP2 | = −1 × [4.71 × (characters/words) + 0.5 × (words/sentences) – 21.43] |
| TRNSP3 | = −1 × [0.39 × (number of words/number of sentences) + 11.8 × (number of syllables/number of words) – 15.59] |
| TRNSP4 | = (Positive words – Negative words) / ( Positive words + Negative words) |
| TRNSP5 | = (Positive words – Negative words) / Total words |
| Main independent variable | |
| CORPCULTURE | = The total occurrences of corporate culture-related words (373 keywords) across MD&A text files, quantitatively measuring the multifaceted dimensions of corporate culture (Creativity, Competition, Control, Collaboration) within the Iranian business context. |
| Control variables | |
| ACSIZE | = Number of members on the audit committee |
| ACIND | = The proportion of independent directors on the audit committee |
| ACFEXPRT | = The percentage of financial experts on the audit committee |
| INSTOWN | = The percentage of the company's shares owned by institutional owners |
| BDINDEP | = The percentage of independent directors on the board of directors |
| BDSIZE | = Total number of directors on the board |
| AUDOPN | = 1 if the audit opinion is qualified, 0 for the unqualified audit opinion |
| AUDTEN | = Auditor tenure in years |
| AQ | = Accrual quality, calculated based on the Dechow and Dichev (2002) model. |
| MB | = Market-to-book ratio calculated as the firm market value by its book value |
| ROA | = Operating income divided by total assets |
| INVREC | = The sum of inventory and accounts receivable divided by total assets |
| DEBTRATIO | = Debt_to_equity ratio computed as total liabilities divided by total equity |
| INVEST | = Current assets less debtors and inventories divided by current liabilities |
| STDSALE | = 5-year standard deviation of total sales scaled by lagged total assets |
| STDOCF | = 5-year standard deviation of operational cashflow scaled by lagged total assets |
| AGE | = The natural log of the number of years since the firm gets listed in the market |
| FINANCING | = An indicator variable that equals one if the sum of new long-term debt plus new equity exceeds 2 percent of lagged total assets |
| ZMJSCORE | = Altman’s Z-score is computed as: [(1.4 × retained earnings + sales + 3.3 × pre-tax income +1.2 × (current assets−current liabilities)) ÷ total assets] |
| Additional variables | |
| CRECULT | = (Creativity) The total occurrences of creativity-related keywords (108 keywords) within MD&A text files, reflecting the emphasis on innovation, originality, and creative problem-solving in corporate disclosures. |
| COMCULT | = (Competition) The total occurrences of competition-related keywords (108 keywords) within MD&A text files, indicating the degree of competitive drive, market positioning, and rivalry emphasized in corporate disclosures. |
| CONCULT | = (Control) The total occurrences of control-related keywords (71 keywords) within MD&A text files, measuring the focus on regulation, governance, and control mechanisms within corporate disclosures |
| COLCULT | = (Collaboration) The total occurrences of collaboration-related keywords (86 keywords) within MD&A text files, assessing the emphasis on teamwork, partnership, and collaborative efforts in corporate disclosures |
| LAG_TRNSP | = Previous period values of the transparency measures (LAG_TRNSP1 to LAG_TRNSP5). |
| BUSINESSRISK | = The natural logarithm of the total count of business risk-related words plus one |
| OPERATIONALRISK | = The natural logarithm of the total count of operational risk-related words plus one |
| FINANCIALRISK | = The natural logarithm of the total count of financial risk-related words plus one |
| TOTALRISK | = The sum of BUSINESSRISK, OPERATIONALRISK, and FINANCIALRISK |
| SIZE | = The natural logarithm of total assets |
| TRNSP1 | = −1 × [0.4 × (number of words / number of sentences + 100 × (number of words with more than two syllables / number of words))] |
| TRNSP2 | = −1 × [4.71 × (characters/words) + 0.5 × (words/sentences) – 21.43] |
| TRNSP3 | = −1 × [0.39 × (number of words/number of sentences) + 11.8 × (number of syllables/number of words) – 15.59] |
| TRNSP4 | = (Positive words – Negative words) / ( Positive words + Negative words) |
| TRNSP5 | = (Positive words – Negative words) / Total words |
| CORPCULTURE | = The total occurrences of corporate culture-related words (373 keywords) across MD&A text files, quantitatively measuring the multifaceted dimensions of corporate culture (Creativity, Competition, Control, Collaboration) within the Iranian business context. |
| ACSIZE | = Number of members on the audit committee |
| ACIND | = The proportion of independent directors on the audit committee |
| ACFEXPRT | = The percentage of financial experts on the audit committee |
| INSTOWN | = The percentage of the company's shares owned by institutional owners |
| BDINDEP | = The percentage of independent directors on the board of directors |
| BDSIZE | = Total number of directors on the board |
| AUDOPN | |
| AUDTEN | = Auditor tenure in years |
| AQ | = Accrual quality, calculated based on the Dechow and Dichev (2002) model. |
| MB | = Market-to-book ratio calculated as the firm market value by its book value |
| ROA | = Operating income divided by total assets |
| INVREC | = The sum of inventory and accounts receivable divided by total assets |
| DEBTRATIO | = Debt_to_equity ratio computed as total liabilities divided by total equity |
| INVEST | = Current assets less debtors and inventories divided by current liabilities |
| STDSALE | = 5-year standard deviation of total sales scaled by lagged total assets |
| STDOCF | = 5-year standard deviation of operational cashflow scaled by lagged total assets |
| AGE | = The natural log of the number of years since the firm gets listed in the market |
| FINANCING | = An indicator variable that equals one if the sum of new long-term debt plus new equity exceeds 2 percent of lagged total assets |
| ZMJSCORE | = Altman’s Z-score is computed as: [(1.4 × retained earnings + sales + 3.3 × pre-tax income +1.2 × (current assets−current liabilities)) ÷ total assets] |
| CRECULT | = (Creativity) The total occurrences of creativity-related keywords (108 keywords) within MD&A text files, reflecting the emphasis on innovation, originality, and creative problem-solving in corporate disclosures. |
| COMCULT | = (Competition) The total occurrences of competition-related keywords (108 keywords) within MD&A text files, indicating the degree of competitive drive, market positioning, and rivalry emphasized in corporate disclosures. |
| CONCULT | = (Control) The total occurrences of control-related keywords (71 keywords) within MD&A text files, measuring the focus on regulation, governance, and control mechanisms within corporate disclosures |
| COLCULT | = (Collaboration) The total occurrences of collaboration-related keywords (86 keywords) within MD&A text files, assessing the emphasis on teamwork, partnership, and collaborative efforts in corporate disclosures |
| LAG_TRNSP | = Previous period values of the transparency measures ( |
| BUSINESSRISK | |
| OPERATIONALRISK | = The natural logarithm of the total count of operational risk-related words plus one |
| FINANCIALRISK | = The natural logarithm of the total count of financial risk-related words plus one |
| TOTALRISK | = The sum of |
| SIZE | = The natural logarithm of total assets |
Source(s): Table created by author
As a benefit of your subscription, you can share temporary access to restricted articles.
Each link will stop working after 30 days or 10 uses. You may create up to 10 links in a 30 day period.
Please sign in to your personal account to gift article access.
As a benefit of your subscription, you can share temporary access to restricted articles.
Each link will stop working after 30 days or 10 uses. You may create up to 10 links in a 30 day period.
Gift articles remaining: --
Each link will stop working after 30 days or 10 uses. You may create up to 10 links in a 30 day period.
Gift articles remaining: --
As a benefit of your subscription, you can share temporary access to restricted articles.
Each link will stop working after 30 days or 10 uses.
You have reached the limit of 10 links within a 30 day period.
Sharing content requires targeting cookies to be enabled. Please update your cookie preferences to use this feature.