SOEs' commitment to transparency: Voluntary disclosure as a driver of mandatory disclosure

Non-compliance with transparency obligations among publicly owned enterprises has revealed the lack of coercive capacity of the legislation. In this context, literature suggests that mandatory disclosure becomes a matter of company willingness, but this has not been empirically tested so far. Drawing on Oliver's (1991) typology of organizational strategies and studies on normativity production, this study analyzes whether voluntary disclosure levels of financial and non-financial information determine compliance with transparency legal requirements for the case of Andalusian state-owned enterprises (SOEs) owned by local and regional governments. We have verified this question using linear regression analysis. The analysis proves that when transparency legislation lacks enforcement power, the level of voluntary disclosure determines the level of legal compliance. Both voluntary and mandatory disclosure levels are explained by the same determinants, suggesting that disclosure is determined by reasons of legitimacy and commitment to transparency. This contributes to the research lines on normativity and transparency in SOEs, being also relevant for lawmakers. This study provides evidence for Oliver's (1991) theoretical arguments about firms' strategies in the face of institutional pressures. It offers policy-makers and SOE managers an insight into how prepared SOEs are to respond to the demands for greater transparency.